Usually, which outweighs the other in decentralization—advantages or disadvantages?
The advantages outweigh the other in decentralization.
In business terms, decentralization refers to the process of delegating the activities among the various departments and personnel of the organization by the authorized sources, groups, or locations.
The advantages of decentralization outweigh the disadvantages because of the
Well-designed performance evaluation systems accomplish many goals. Consider the following actions, and state which goal is being achieved by the action:
a. Comparing targets to actual results
b. Providing subunit managers with performance targets
c. Comparing actual results with industry standards
d. Providing bonuses to subunit managers who achieve performance targets
e. Aligning subunit performance targets with company strategy
f. Comparing actual results of competitors
g. Taking corrective actions
h. Using the adage “you get what you measure” when designing the performance evaluation system
Wolf Paints is a national paint manufacturer and retailer. The company is segmented into five divisions: Paint Stores (branded retail locations), Consumer (paint sold through home improvement stores), Automotive (sales to auto manufacturers), International, and Administration. The following is selected divisional information for its two largest divisions: Paint Stores and Consumer.
Net Sales Operating Average
Revenue Income Total Assets
Paint Stores $ 3,980,000 $ 476,000 $ 1,380,000
Consumer 1,315,000 195,000 1,600,000
Management has specified a 21% target rate of return.
1. Calculate each division’s ROI. Round all of your answers to four decimal places.
2. Calculate each division’s profit margin ratio. Interpret your results.
3. Calculate each division’s asset turnover ratio. Interpret your results.
4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results.
5. Calculate each division’s RI. Interpret your results, and offer a recommendation for any division with negative RI.
6. Describe some of the factors that management considers when setting its minimum target rate of return.
94% of StudySmarter users get better grades.Sign up for free