Choice of Strategic Business Unit Hamilton-Jones, a large consulting firm in Los Angeles,has experienced rapid growth over the last 5 years. To better serve its clients and to bettermanage its practice, the firm decided 2 years ago to organize into five strategic business units,each of which serves a significant base of clients: accounting systems, executive recruitment andcompensation, client-server office information systems, manufacturing information systems, andreal-estate consulting. Each SBU is served by a variety of administrative services within the firm,including payroll and accounting, printing and duplicating, report preparation, and secretarialsupport. Hamilton-Jones’s management closely watches the trend in the total costs for eachadministrative support area on a month-to-month basis. Management has noted that the costs inthe printing and duplicating area have risen 40% over the last 2 years, a rate that is twice that ofany other support area.Required Should Hamilton-Jones evaluate the five strategic business units as cost, revenue, profit centers? Why? How should the administrative support areas be evaluated?
Choice of Strategic Business Unit Hamilton-Jones, a large consulting firm in Los Angeles,
has experienced rapid growth over the last 5 years. To better serve its clients and to better
manage its practice, the firm decided 2 years ago to organize into five strategic business units,
each of which serves a significant base of clients: accounting systems, executive recruitment and
compensation, client-server office information systems, manufacturing information systems, and
real-estate consulting. Each SBU is served by a variety of administrative services within the firm,
including payroll and accounting, printing and duplicating, report preparation, and secretarial
support. Hamilton-Jones’s management closely watches the trend in the total costs for each
administrative support area on a month-to-month basis. Management has noted that the costs in
the printing and duplicating area have risen 40% over the last 2 years, a rate that is twice that of
any other support area.
Required Should Hamilton-Jones evaluate the five strategic business units as cost, revenue, profit centers? Why? How should the administrative support areas be evaluated?
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