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The conventional wisdom of management accounting, as reflected in textbooks, advocates that the evaluation of a manager’s performance should consist of only those factors under a manager’s control. Therefore, divisional managerial performance measures should include only the items controllable by divisional managers. Or, performance measurement should be based on the application of the controllability principle.
A manager is said to have a decision right if the enforcement and disciplinary powers of the top- level executive office will be used to enforce his ability to take an action. In large organizations, decision rights are more complex than the simple phrase suggests...
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