Evaluation of effectiveness of responsibility centers in the management accounting system

Svetlana Drobyazko; Alla Shapovalova; Olena Bielova; Oleksandr Nazarenko; Marian Yunatskyi

Evaluation of effectiveness of responsibility centers was studied on basis of reporting for different levels of management, in terms of their overall performance, which should be based on previous key indicators, which should be understood as a set (a system) of indicators both financial and non-financial, enabling managing personnel to determine the extent to which they have reached strategic and operational goals. At the same time, segregation of the appropriate types of centers of responsibility, depending on the chosen approach to implementation of management accounting at enterprises was justified. To achieve target performance indicators of responsibility centers an employee motivation system with financial and social incentives was developed aiming not only to identify contribution of certain responsibility centers in the process of accomplishing management goals, but personal contribution of each individual employee. To evaluate sufficiency of information in management reporting, a diagnostic map developed based on analysis of key indicators is proposed.

Keywords: Responsibility Centers, Key Performance Indicators, Management Accounting, Management Reporting, Diagnostic Map.