12-2 The benefits of decentralization include:
or in part to any one of the segments. If the
(1) freeing top managers to focus on strategy,
departments of a company are treated as seg-
higher-level decision making, and coordinating
ments, then examples of the traceable costs of a
activity; (2) improving operational decision mak-
department would include the salary of the de-
ing, since lower-level managers often have bet-
partment’s supervisor, depreciation of machines
ter information about local conditions; (3) ena-
used exclusively by the department, and the
costs of supplies used by the department. Ex-
bling quicker response to customer needs; (4)
amples of common costs would include the sal-
training lower-level managers to take on greater
ary of the general counsel of the entire com-
responsibility; and (5) providing greater motiva-
pany, the lease cost of the headquarters build-
tion and job satisfaction for lower-level manag-
ers.
ing, corporate image advertising, and periodic
depreciation of machines shared by several de-
partments.
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