Management structure for incentives and backing must align to the interest of the owners. The basic structure is the percentage of gross profits less operating expenses and gross revenues. Operating expenses and gross revenues are crucial in basic incentive structure.
The key decision lies with the expedition leaders appointed by the senior officials under the influence of organizational objectives. The decisions made by the management aim at minimizing operating expenses and enhancing fiscal responsibility. The management structure should restrict technical cooperation using expatriates.
The CEOs own the management chain. They consider ideas and perspectives on issues regarding incentives to ensure that consultancies embrace the business and consider the clients of the business. The CEOs oversee the strategic level management in order to engage consultants with regard to the decisions made.
The consultancy can be considered as a profit centre. Profit centre refers to the company’s section that enables separate calculation of profits and losses. The management accounts for revenues and costs, which entail the profits.
In terms of the managerial responsibilities, managers drive activities on sales revenue that enhances cash inflows and control the costs; hence, the profit centre management proves to be more challenging than the cost centre. The management in profit centers resembles independent business and act as a distinct entity, which ensures that expenses and revenues are determined at required profitability .
In leadership structure, the separation of profit centers from accounting purposes enhances the follow-up (by the management) of the profits from each centre to enhance comparison of profits and efficiency. In profit centers, managers control production and sales.
The managers make decisions on products and services, mode of production, sales, prices, quality level and the distribution systems. The leader never determines the capital investment, but he makes the decision.
The leadership structure comprises of substantial department within the parent organizational management. From the legal, management, financial and governance, profit centre leadership is internal to the non-profit organization. Profit centers take the idea of a cost centre further .
In terms of quality management, the management structure ensures quality control by overseeing the processes, procedures and resources needed in implementing the decisions made.
The management brings together the transparency and sustainability initiatives, both for the customer and investor’s satisfaction. This assumes a reduction in problems related with quality as a result of transparency, documentation, thinking and the diagnostic discipline.
The management structure defines clearly implementation roles, authorities, responsibilities, processes, communication channels and accountability. A leader in a certain profit centre ensures availability of the appropriate resources to sustain all levels of the quality assurance program in the organization. This is under the management of Regional Quality Assurance Manager (RQAM).
The regional administrator, his deputy and members of the staff ensure that services delivered are of high quality. The manager in profit centre/region reports directly to the director of the organization. The leadership is critical in implementing a quality system to allow for the advocacy of services by the profit centre.
For instance, delivery of high or poor quality services at unnecessarily high cost or inconsistently is dangerous for a business. Therefore, the management ensures delivery of high quality services at minimum cost.
References
Deckop, J. R. (2006). The Effects of CEO Pay Structure on Corporate Social Performance. Journal of Management 32(3), 329-42.
Lai, K., & Gilbert, L. (2004). Total Quality Management & Business Excellence Original Articles 15(2), 147-59.
Smith, M., & Pretorius, P. (2003). Application of the TOC Thinking Processes to Challenging Assumptions of Profit and Cost Centre Performance Measurement. International Journal of Production Research 41(4), 819-28.