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IMANET Exam CMA Topic 5 Question 61 Discussion

Actual exam question for IMANET's Certified Management Accountant exam
Question #: 61
Topic #: 5
[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''

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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.

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