responsibility-accounting.docVIP

McGraw-Hill/Irwin ? 2002 The McGraw-Hill Companies, Inc. 12- PAGE 56 Solutions Manual McGraw-Hill/Irwin ? 2002 The McGraw-Hill Companies, Inc. Managerial Accounting, 5/e 12- PAGE 55 CHAPTER 12 Responsibility Accounting and Total Quality Management ANSWERS to Review Questions 12-1 A responsibility-accounting system fosters goal congruence by establishing the performance criteria by which each manager will be evaluated. Development of performance measures and standards for those measures can help to ensure that managers are striving toward goals that support the organizations overall objectives. 12-2 Goal congruence results when the managers of subunits throughout an organization strive to achieve objectives that are consistent with the goals set by top management. In order for the organization to be successful, the managers and employees throughout the organization must be striving toward consistent goals. 12-3 Several benefits of decentralization are as follows: (a) The managers of an organizations subunits have specialized information and skills that enable them to manage their departments most effectively. (b) Allowing managers autonomy in decision making provides managerial training for future higher-level managers. (c) Managers with some decision-making authority usually exhibit greater motivation than those who merely execute the decisions of others. (d) Delegating some decisions to lower-level managers provides time relief to upper-level managers. (e) Delegating decision making to the lowest level possible enables an organization to give a timely response to opportunities and problems. Sever