From Cost Center to Profit Center

Introduction Organizations with decentralized operations structures typic every(prenominal)y divide their operations into toll or win touch ons. It is a management and strategic conclusiveness for companies to decide which divisions should be exist warmnesss and which ones should be profit centers. . A cost center may actually provide function that could generate a profit if they were offered on the open market. and in most corporate environments, cost centers are non expected to generate a profit and operation be are treated as overhead. Departments that are typically cost centers include information technology, human resources, accounting, and others. Both cost and profit centers would add something to the bottom line of companies. Profit centers could generate network for companies. Cost centers would reduce costs therefore increase win for companies. Sometimes, a cost center in one accompany may be a profit center in some other company. Thus, a center that direct relates to the shopping center competence of the company is usually a profit center and all other centers that do not have directly related to core business would be cost centers. However, in recent year, much and more companies which have operated with cost centers in the past decide to change some or all of those cost centers to profit centers.

They feel that these changes may generate more benefits for the organization in the long-run. This paper depart discuss the deflection between cost center and profit center and the reasons for conversion. It will introduce a success story; examine the considerations which essential be taken into account when making this determination. Definition In business, an operational unit is either making money or its detracting from a companys profits. Simply, this is the difference between a profit center and a cost center. A cost center is a unit of an organization that generates expenses and has no responsibility for generating revenue. The only view a cost center has is... If you want to get a full essay, order it on our website: Ordercustompaper.com

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