Decentralization

Accounting Terms Dictionary

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Decentralization

Allowing individual divisions of a company to have decision making power.

Amy’s is a department store chain with three stores in very different neighborhoods. Each store manager is allowed to carry different merchandise depending on the likes and dislikes of the people in the surrounding neighborhood. We would say that the buying is decentralized, done by each individual store rather than being done by one buyer at central office.

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