- Designing a Responsibility Center
10.1 For each responsibility center, determine the exact or appropriate funding
required achieving the objectives.
10.2 Under each objective determine the number of variables in order of
priority in terms of quantity and quality
10.3 Under each variable indicate the achievable targets in terms of quantity,
quality and time standards.. If necessary, indicate a phasing out of such
targets, if required on a monthly, quarterly, half yearly or an annual basis.
Where it is not possible to explain the targets in measurable terms, indicate
the same in the form of statements. Under each variable, ensure that you:
∆ Briefly explain the variations under each variable between the
bench mark and the proposed standards
∆ List out the activities to be undertaken to fill the gap between the
bench mark and proposed standards.
∆ Mention implementation methods and strategies preferably in terms
of time standards with expenditure plan
∆ Develop unit cost under each variable by following the techniques
of least cost methods.
∆ In case of taking project as responsibility center adopt the network
techniques.
∆ Develop methods to measure the periodical performance under each
variable coming under each objective. For this purpose establish
an internal monitoring system, which clarifies:
- who has to measure what
- at what periodicity should it be measured
- under which variable should it be measured
- which yard stick should be chosen for measuring the
variable
- to whom should a report with periodical results be
submitted
- what action should be taken by the person who receives the
periodical reports.
In other words MIS shall be adopted.
