Professional Documents
Culture Documents
MCS
MCS
Delegation (1/1)
Delegation without authority is of no consequence. It is like tying the hands and feet of a person and asking him to run. Delegation of the powers to the manager of the decentralised unit is the soul of decentralisation. Authority must be delegated commensurate to the activities / goals and the capability of the manager in charge.
Efficiency:
It is a comparative, rather than absolute measure of performance we say that one is more efficient than the other or one is more efficient now than in the past or one is more efficient than the standards/ideal etc. It is mostly quantitative measure between the input and the output
Epitome:
In other words one is efficient if one does the things right, and one is effective if one does the right things.
Responsibility Centers
Definition: A responsibility center is an organisation unit that is headed by a manager who is responsible for its actvities.
Revenue Centers(1/3)
In a revenue center, output (i.e. revenue is measured in monetary terms, but no formal attempt is made to relate input (i.e. expense or cost) to output.
Revenue Centers(3/3)
Inputs are not related to outputs
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Examples: Marketing, Sales and Distribution, Counselors in academic or financial products etc.
Expense centers(1/7)
Expense centers are responsibility centers whose inputs are measured in monetary terms, but whose outputs are not. There are two types of the expense centers: Engineered Expenses Center:
These are those centers for which the costs can ascertained with precision. For example, raw material cost, wages, power, fuel etc.
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Business Unit or Strategic Business Unit (SBU)(2/11) Companies create business units because they have decided to delegate more authority to the operating managers. Degree of delegation may differ from company to company However the complete authority for generating profit is never delegated to a single segment of the business
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These are business units (with some modifications or amendments functional units can be converted as business units)
Capital Employed