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Chapter 24: Q4RQ (page 1355)

What is goal congruence?

Short Answer

Expert verified

Goal congruence is the stage where the various departments of anorganizationshare common goal.

Step by step solution

01

Meaning of Organization

Organization refers to the association of people united mutually to accomplish common goals stated by the management.An organization comprises various divisions such as production, administration, marketing, and many more.

02

Meaning of goal congruence

The term goal congruence refers to a situation where the multiple levels of an entity, such as lower, middle, and upper levels, perform their activities for the accomplishment of the same goal. Goal congruence leads to the accomplishment of thestrategy of the organization.

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Most popular questions from this chapter

What are some limitations of financial performance measures?

Decentralization divides company operations into various reporting units. Most decentralized subunits can be described as one of four different types of responsibility centers.

Requirements

1. Explain why companies decentralize. Describe some typical methods of decentralization.

2. List the four most common types of responsibility centers, and describe their responsibilities.

Question: What is the purpose of a responsibility accounting system?

Sheffield Company manufactures power tools. The Electric Drill Division (an investment center) can purchase the motors for the drills from the Motor Division (another investment center) or from an outside vendor. The cost to purchase from the outside vendor is \(20. The Motor Division also sells to outside customers. The motor needed by the Electric Drill Division sells for \)25 to outside customers and has a variable cost of $15. The Motor Division has excess capacity.

21. If Sheffield Company allows division managers to negotiate transfer prices, what is the minimum amount the manager of the Motor Division should consider?

22. What is the maximum transfer price the manager of the Electric Drill Division should consider?

What is goal congruence?
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