Any companies try to to organize their business into centers, because they can hold the manager of each responsibility center accountable for the entire performance within his/her responsibility center. The problem with the other three types of responsibility centers is that excuses are so easy to come by: "I didn’t have the resources I needed", "Another department drove up costs," or "Another department didn’t sell enough." With (same word as before) centers, the manager has authority over revenue, costs, and investments.

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Many companies try to to organize their business into responsibility centers, because they can hold the manager of each responsibility center accountable for the entire performance within his/her responsibility center. The problem with the other three types of responsibility centers is that excuses are so easy to come by: "I didn’t have the resources I needed," "Another department drove up costs," or "Another department didn’t sell enough." With responsibility (same word as before) centers, the manager has authority over revenue, costs, and investments.

Explanation:

In order to have a better insight into the meaning of the above statement, let us understand the concept of A responsibility centre.

A responsibility center is a part or sub-unit of a company in which the manager has some degree of authority and responsibility. The company's detailed organization chart is a logical source for identifying responsibility centers. The most common responsibility centers are the numerous departments within a company.

FIND ATTACHED DIAGRAM OF A RESPONSIBILITY CENTRE

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