This contribution is a joint production by the harlequins RGE and BCO.
RGE: We enjoyed celebrating at our office. Good deals, for example, or new customers. With bubbly.
Sometimes business even went much better than expected. From the management’s point of view, this was not very fortunate because our units were organised as profit centres. The general demand for business growth was about 5% per year. If it was actually higher, it automatically increased expectations the following year.
Now there are different possibilities to reduce the profit in the current year. For example, by increasing costs. But what can you do if the IT hardware and furniture have already been replaced? Exactly. Buy sparkling wine. And so much that a whole storeroom could be filled with it.
Internal competition makes us more cost-conscious and better
BCO: We also switched to profit centres because employees allegedly had little cost awareness. Branch managers were lured with bonuses when they improved their unit’s results.
As a result, some customers were surprised when several units of our company submitted different proposals for the same tender.
Another was that services offered internally or even external assignments for other internal – but therefore alien – profit centres had to be paid for at the market price. Since some external providers were cheaper, they were often awarded contracts by our company because it looked better on a unit’s balance sheet, regardless of whether the overall company result was worse.