What should be centralized and what should not: that is the question within a school of business context

Abstract

<jats:sec><jats:title content-type="abstract-subheading">Learning outcomes</jats:title> <jats:p>The case’s learning objectives to work on can vary according to the topic selected by the teacher. This case has been put forward with a particular interest in corporate strategy issues, specifically, on the joint management of businesses (in this case, academic programs). Therefore, students are expected to be able to understand the managerial dilemma on centralization and decentralization; recognize the peculiarities of a shared services center (SSC); and decide on which services to centralize in an SSC.</jats:p> </jats:sec> <jats:sec><jats:title content-type="abstract-subheading">Case overview/synopsis</jats:title> <jats:p>Centralizing or not centralizing is a frequent managerial dilemma. This is a challenge faced not only by business managers but also by corporate level areas responsible for jointly managing various businesses. Resources and capabilities allocation is an essential process for strategy execution, specifically in corporate strategy that must answer the question: How to jointly manage businesses? Sharing services is a collaborative strategy which aims to increase efficiency by centralizing some processes related to this joint business management. Mario, Dean of the Escuela de Administración in Medellín, Colombia, intends to optimize the school resource allocation processes so that there is more equitable support between the different academic programs. For this, he has thought of creating an SSC as it is a practice that he has seen in prominent companies in the city. His idea is to start operating the SSC in early 2018; however, the particular character of a management school leads him to ask himself: What to centralize and what not to centralize?</jats:p> </jats:sec> <jats:sec><jats:title content-type="abstract-subheading">Complexity academic level</jats:title> <jats:p>This case of decision (Ellet, 2007; Sánchez <jats:italic>et al.</jats:italic>, 2013) can be used to promote student learning of strategy courses both at advanced undergraduate levels and in graduate programs. Likewise, it can be used in workshops with executives and administrative personnel of companies that face the centralize–decentralize dilemma. These types of topics are the subject of study by both corporate strategy theorists who address the question of how to jointly manage business (Menz <jats:italic>et al.</jats:italic>, 2015; Michael Porter, 1987) and consultants (Deloitte, 2012). It is desirable, although not mandatory, that students have some knowledge or experience in strategic issues and challenges associated with the administration of companies made up of various businesses (multi-business firms).</jats:p> </jats:sec> <jats:sec><jats:title content-type="abstract-subheading">Supplementary materials</jats:title> <jats:p>Teaching Notes are available for educators only.</jats:p> </jats:sec> <jats:sec><jats:title content-type="abstract-subheading">Subject code</jats:title> <jats:p>CSS 11: Strategy.</jats:p> </jats:sec>