IMANET Exam CMA Topic 2 Question 58 Discussion

Actual exam question for IMANET's Certified Management Accountant exam

Question #: 58
Topic #: 2

[All Certified Management Accountant Questions]

The CEO of a rapidly growing high-technology firm has exercised centralized authority over all corporate functions. Because the company now operates in four states, the CEO is considering the advisability of decentralizing operational control over production and sales. Which of the following conditions probably will result from and be a valid reason for decentralizing''

AGreater local control over compliance with federal regulations.

BMore efficient use of headquarters staff officials and specialists.

CQuicker and better operating decisions

DGreater economies in purchasing

Show Suggested Answer

Suggested Answer: C

Decentralization results in greater speed in making operating decisions because they are made by lower-level managers instead of being referred to top management. The quality of operating decisions should also be enhanced, assuming proper training of managers, because those closest to the problems should be the most knowledgeable about them.

by Micaela at Sep 22, 2022, 10:05 PM

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