Decentralized organizations have the ability to create divisions of itself that are called responsibility centers. One of the features and advantages of this is that managers have decision-making independence and are empowered to run their own departments. Which of the following best represents the presence of authority, one of the three characteristics of a responsibility center?
A) A company moves from a model where a department is able to set working hours for its employees to a company-wide policy for all employees.
B) Carleigh, the divisional manager delegates analysis tasks to his employees and has the decision-making authority to purchase assets for his division.
C) The company CEO insists that they must approve any new hires selected by the accounting department.
D) The sales manager decides not to delegate paperwork to subordinates so that they can monitor all activity.

Question

Quizplus · Accepted Answer

This question requires familiarity with authority, one of the three characteristics of a responsibility center. Choice B is the only one of the four choices that accurately depicts the presence of authority by allowing a divisional manager to delegate tasks and make decisions that will immediately impact their department and eventually the company as well. The other three choices represent a lack of authority where higher-level executives have not allowed the department to have the authority or ability to make decisions independent of them.

Decentralized Organizations Have the Ability to Create Divisions of Itself