Decentralisation- Delegating to of organisation by management
In non-divisionalised organisations, organisation as whole is an & below this level there is consisting of centres & centres
In divisionalised organisations, organisation is divided into separate or & below this level there is consisting of centres & centres
Divisional economic performance can be influenced by many beyond of divisional managers. To evaluate performance of divisional managers, an attempt needs to made to between & performance
To evaluate performance of divisional manager only those items by them should be included in divisional financial measures. Therefore, this does not include of as they cannot be influenced by divisional managers
Return on investment (ROI)- Method of appraising where from project are divided into , also known as of & on
One advantage of return on investment is that it managers to focus on , & required to generate those
Another advantage of return on investment is that it can be used to relative performance of for business units of different
Third advantage of return on investment is that it promotes an of between , &
One disadvantage of return on investment is that it managers to focus on financial performance at expense of viability & competitiveness
Another disadvantage of return on investment is that it managers to asset replacement. They act in this way to maintain & show
Third disadvantage of return on investment is that it managers from in projects which are from point of view, but investment centre’s ROI
Residual income- less charge on investment by divisional manager
One advantage of residual income is that it takes account of organisation’s in measuring & therefore more likely to promote , compared to
Another advantage of residual income is that it investment in projects which yield to organisation
One disadvantage of residual income is that it is an monetary measure which means it is to compare performance of with that of other or companies of different , unlike ROI
Another disadvantage of residual income is that formula is in of businesses, unlike
Third disadvantage of residual income is that it can encourage /, as with
Economic value added- Refinement of measure that incorporates to divisional financial performance measure for introduced by generally accepted
One advantage of economic value added is that it removes that arise when measuring based on
One disadvantage of economic value added is that it is an
To measure managerial performance only & should be included whereas to measure economic performance & should be included
Three approaches that can be used to reduce dysfunctional consequences of short-term financial measures are use of measures such as , performance measurement & focusing on both & measures using