Large organizations can be difficult, if not impossible to manage as a single unit. To address this issue, companies decentralized or separate into manageable segments or divisions.
The following are advantages and disadvantages of decentralized companies:
Accounting Tools (2016) defines responsibility accounting as follows: responsibility accounting is a reporting system that compiles revenue, cost, and profit information at the level of those individual managers most directly responsible for them. The intent is to provide this information to those people most able to act upon it, as well as to judge their performance. Responsibility accounting is most commonly used in an organization that distributes responsibility down through the corporate hierarchy.
We collect and distribute budget data of responsibility centers in a decentralized organization. A responsibility center is a part of an organizational unit that is supervised by a manager, who has decision making authority over the center, and is responsible for its for the controllable results of the center.