From profit center to strategy center management

Abstract

The contemporary challenges in strategic management concentrate on the questions of how implementation of strategies work. This article discusses a crucial problem of structuring a firm and provides criteria to evaluate the strategic performance of profit center management. The main objective is to show that the profit center management concept is an operative one but can neither answer the questions of the strategic future of the firm nor correspond to the methodology of strategic management. Strategic management needs more than strategic planning. Structural and behavioral aspects have to be integrated in the strategic plan and it is necessary to consider these before strategies are determined. The structural pre-conditions of business strategies must be worked out during the process of strategy formulation, not afterwards.