The Diffusion of Shared Service Centers – Based on Rational Arguments or Trends? A Case Study of the Motives and Decision-Making Process at Four Organizations

Abstract

Background and problem: A palpable trend in organizations today is to centralize several finance departments and create a shared service center (SSC). Few previous studies have examined the motives behind this, and those that have often seem to implicitly assume that the motives are based on rational decision-making. As management ideas are known to spread as trends, we question the view that only rational motives are behind organizations adopting an SSC.

Aim of study: The aim of this thesis is to investigate the motives behind the implementation of an SSC and understand if the decisions to implement shared services are based solely on rational motives or if trends are a factor as well.

Methodology: Our case study is based on data collected at four different organizations that have implemented an SSC. At each organization, we conducted one semi-structured interview with a key person.

Conclusions: We conclude that all four organizations have rational motives for implementing shared services. The main motive for all organizations was to save resources, either to use to focus on core activities or as a goal in itself (cost savings). The decision-making process behind the implementation was swift and it seems as though an SSC was seen as an obvious solution that did not require much investigation. To some extent, we believe that this had to do with external factors, such as trends. If SSCs were not a commonly used management idea, we believe that our studied organizations would have spent more time investigating whether to implement it. Thus, this suggests that their decision-making processes are not entirely rational.