The objective of this report is to examine the rationale behind the decision to centralise the accounting and administration function within a modern Australian company. In order to examine this decision and understand the resulting impact on the way an organisation operates, an overview of the issues and literature dealing with alternative organisational structures is presented which sets the framework for an in depth case study.
Analysis of the outcomes of centralisation in this case indicate that modern companies are undergoing a transition, whereby recognition of the importance of core activities has lead to the downsizing of identified support departments. The function of accounting, whilst vital to the provision of timely and accurate information to management in order to run a modern company, is clearly viewed as such a support service. As a result there is an opportunity for companies to implement sufficiently sophisticated information systems and modify existing administrative procedures to allow the centralisation and downsizing of such departments, thereby substantially reducing costs to the organisation, whilst improving senior management's access to information.