The Effect of Implementing Shared Service Centers: An Empirical Study

Abstract

The purpose of this paper is to empirically examine the effect of implementing shared service centers based on the data obtained from financial statements and a questionnaire survey. Shared service centers provide operational divisions with administrative services. While precedent studies suggest that the centers improve the balance of cost and quality of resource allocation within group companies, results of this event study indicate that, reducing sales, general and administrative costs as well as improving the task quality after shared service centers implementation. In addition, the results show that the types of shared service centers influence the magnitude of these effects.