Specific Business Models for Romanian Companies – Shared Services

Abstract

Shared service centres have emerged since the 1990s and refer to a variety of functions: information technology, SAP support, accounting, payroll, management reporting, purchasing, call centres, helplines, market surveys via phone or the internet. Shared service units can be organized in several forms but are in each case, a particular value pattern distinct from the standard market price/ shareholder profit pattern. The purpose of this article is to analyze value patterns, and this article is part of broader research on value-based management. Shared service units can be organized according to the organizational design of the matrix organization, or according to the multidimensional organization. Shared service units may be charged via a transfer price system to the receiving corporate-related company. These are iterative activities, organized according to the activity-based costing logic. Alternatively, shared services can refer to more complex functions that provide service to corporate functions. They can be organized according to the multidimensional organization logic as allocations to the operating units. The value proposition of shared service units differs from market price and profit-driven financial statements. Shared service units require low personnel cost and stability, both of which indicate to Romania as a favourable location. These are the two arguments in favour of shared services as a specific model for Romanian companies, a country in which we find evidence shared services have been set up in the past ten years as parts of corporations.