Compare and contrast centralization with decentralization
What will be an ideal response?
Answer: Centralized organizations focus decision-making authority near the top of the chain of command. Centralization can benefit a company by utilizing top management's experience and broad view of organizational goals. In addition, it can help companies coordinate large undertakings more efficiently, accelerate decisions that might otherwise get bogged down in discussions and disagreements, and reduce the number of overlapping capabilities.
In contrast, decentralization pushes decision-making authority down to lower organizational levels–such as department heads–while control over essential company-wide matters remains with top management. Implemented properly, decentralization can stimulate responsiveness because decisions don't have to be referred up the hierarchy. However, decentralization does not work in every situation or in every company.
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Polaris Industries is forecasting its financial statements for Year 10. Selected financial information for Year 9 is provided in the table. What is the forecasted balance of cash in Year 10? (Cash is the plug account
) Use the percentage of sales method to calculate accounts receivable for year 10 (based on the Year 9 values). Selected Financial Information Polaris Industries Inc ($000s) Year 9 Forecast Revenue $2,084,194 $2,292,614 Current Assets Cash $ 19,675 Accounts Receivable 354,313 Total current assets 373,988 Net property and equipment 300,000 300,000 Goodwill 172,632 172,632 Total Assets $846,620 LIABILITIES & OWNERS' EQUITY Total Liabilities $446,053 $494,047 Total owners' equity 400,567 455,337 Total Liabilities & Owners' Equity $846,620 $949,384 A) $80,300 B) $85,343 C) $87,008 D) $89,078 E) $90,731