Passage below require critical analysis and breakdown

This article analyses the use of Responsibility Accounting (RA) and how it affects the overall structure of company. The decision making process as well as managerial actions are the backbone of a company and vital to it successes. This article identifies how responsibility accounting can create a bridge between the headquarters and subsidiaries systems within the company structure. It also links human and technological efforts to maximize efficiency. When used properly responsibility accounting will established structure with an enterprise resources planning (ERP) system. This will give the company strategic options that can be converted into adaptive strategy. The article pulls from many different case studies to form an break down of how RA can improve systems and influence managerial decisions.

RA focuses on a costing approach to accounting, where an organization is divided in responsibility center. Each responsibility center has a sub-unit that it is responsible for and measures the performance of. Each RC has a manager who is held accountable through calculations set by higher managers. The article stated this means that RA is used to developed relationships that are built on accountability. This systems generates a chain form lower managers to higher. In RA structure responsibilities are clearly defined and performance is passable up the chain. Due to RA using accountability based system managers are given autonomy. This creates a decentralized decision making process that allows the company to operate in as one unit even though it has many independent parts. Responsivity accounting is a valuable tool for many companies.

This article outlines how useful of a tool RA can be when used for the right company. The RA structure works when the headquarters can pass down accountability to lower levels. These lower levels will act as their own units which allows them to make their own decision. However they are held completely reliable for the decisions they make. I believe RA is a good tool but not for all companies. I feel companies that are smaller would not benefit from this structure. Smaller companies may not have the man power to have decentralized decision making. Large companies that have more moving parts may find RA more usefully. With many different departments that employ a lot of people having a decentralized system may work better. It will also make the system run faster because decisions are made without needing to pass them up to headquarters. Responsivity accounting should be analyzed and before a company implements it into their system.