Summary
The chief rationale for the multi-divisional (M-form) corporation is to improve decision making within divisionalized business units, whilst maintaining control and presenting a coherent financial strategy to investors. Thus, the development of policy at corporate level is separated from local, market focused management. To develop and orchestrate group policies, certain support functions, such as HR and accounting, are based within head office and the officials act as a channel of communication with divisions and aggregate operating information for top management. A parallel development was a rethinking of the basic premise of the firm in terms of the distinction between its core and non-core activities, with the latter being commoditized into task sets that could be bought-in from the lowest bidder. To summarize, shared services can be seen as a part of the evolving story of the M-form company and not just about operational expediency in the short term.
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Extract
The Role of Shared Services
"The further we look back in time, the more clearly we might see the future."
Winston ChurchillThe chief rationale for the multi-divisional (M-form) corporation is to improve decision making within divisionalised business units, whilst maintaining control and presenting a coherent financial strategy to investors. Thus, the development of policy at corporate level is separated from local, market focused management. Further roles of top management are to allocate resources between divisions and to monitor progress of individual divisions against their plans - usually based upon return on investment. To develop and orchestrate group po...See the full content of this document
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