Page 45 - Accounting Information Systems

16 PART I Overview of Accounting Information Systems

FI GU RE THE FLOWS OF RESPONSIBILITY,AUTHORITY, AND ACCOUNTABILITY THROUGH THE
1-7 ORGANIZATION

President

Vice President Vice President Vice President Vice President
Marketing Production Finance Computer Services

Manager Manager Manager
Plant 1 Plant 2 Plant 3 Responsibility
and Authority

Manager Manager Manager
Unit 1 Unit 2 Unit 3 Accountability

Some firms use more than one method of segmentation. For instance, an international conglomerate
may segment its operations first geographically, then by product within each geographic region, and then
functionally within each product segment.

FUNCTIONAL SEGMENTATION
Segmentation by business function is the most common method of organizing. To illustrate it, we will
assume a manufacturing firm that uses these resources: materials, labor, financial capital, and informa-
tion. Table 1-2 shows the relationship between functional segments and these resources.
The titles of functions and even the functions themselves will vary greatly among organizations,
depending on their size and line of business. A public utility may have little in the way of a marketing
function compared with an automobile manufacturer. A service organization may have no formal produc-
tion function and little in the way of inventory to manage. One firm may call its labor resource personnel,
whereas another uses the term human resources. Keeping in mind these variations, we will briefly discuss
the functional areas of the hypothetical firm shown in Figure 1-8. Because of their special importance to

TAB L E
1-2 FUNCTIONS FROM RESOURCES

Resource Business Function
Materials Inventory management
Production
Marketing
Distribution
Labor Personnel

Financial Capital Finance
Information Accounting
Information technology