The challenge of managing support functions in a complex organization - A case study of how NCC manages their shared service center

Abstract: A challenge large complex organizations are facing today is how to become more efficient. By having a shared service center (SSC) and thus concentrating the support functions within the organization, the producing units can instead focus on their core business. The purpose of this paper is to explore how to manage support functions in a decentralized organization. This will be investigated by studying what control types are used to manage a SSC. The control types will be followed by studying how the MCS reveal and manage tensions that have arise form the integration and coordination of activities. To explore this we have made an in-depth case of the SSC within the building company NCC. The MCS is mapped by using the framework of Merchant and Van der Stede (2012) that specifies result-, action-, personnel- and culture control. Further by using the framework by Busco et al. (2008) the following tensions are studied: centralization vs. decentralization of decision-making, convergence vs. differentiation of practices and vertical and lateral relationships.By mapping the MCS it was found that results control is more prominent on a higher hierarchical level while action-, personnel- and cultural control are more used on an operational level. By studying the MCS for managing tensions, one finding regarding tensions is that a highly centralized SSC lead to dissatisfied customers. However with well functioning forums and meetings where customers are involved in the decision making process helps to mange the tension between centralization and decentralization. Another finding is that the level of convergence and differentiation is managed by SLA. By having a strong cultural control with personal relationships, the SLA can be outperformed and therefore is not enough to steer employees regarding convergence. A third finding is that employees can also be confused by having somewhat contradictory forces of control with efficient processes pointing at convergence and customer focus pointing more at differentiation. Here managers have a role to steer the employees in the right direction.