Decentralized firms can delegate authority by structuring an organization into responsibility centers. Which of the following organizational segments is most like a totally independent, standalone business where managers are expected to "make it on their own"?
A) Cost center.
B) Revenue center.
C) Profit center.
D) Investment center.
E) Contribution center.

Question

Quizplus · Accepted Answer

Investment centers are treated like independent businesses within a firm, with managers responsible for both profits and the invested capital. This autonomy includes decisions on investments, expenses, and revenues, closely mirroring the operations of a standalone business.

Decentralized Firms Can Delegate Authority by Structuring an Organization into Responsibility