Cost-center vs Profit center

I don’t know how a MBA level course would differentiate between a cost-center and a profit-center, but i would define based on the drive/motivation of the majority people on the unit.

If it’s to maximise profits it’s a profit centre and if it’s to reduce costs, it’s a cost-centre. Now this leads to some interesting combinations. like being in an off-shore development centre, i am part of a cost centre at the client’s company, while at the offshore company that am an employee of every billed hour is a profit. So am at a profit-centre…

Or so goes the theory… In practice, it comes down to the mindset of the people you work with/ones who are managers right above you. It comes down to their view of the world and it’s future as zero-sum game or non-zero sum game. I personally prefer to play a non-zero sum game, and have found that when i end up working for someone who plays a zero-sum game, am miserable… Infact, you can simplify all my job switches to that factor. The question then becomes what’s the average time it takes for me to figure out whether someone’s playing a zero-sum game or a non-zero sum game. And how can i Reduce that…
Now there’s one more part to it that i am missing in that simplification… That’s you almost always work in a team/group of people and rarely with 1/2 people/manager.
And almost always, there’s that weighting given in the decision-making process to different people in different ratios… The net will be a weighted sum, which is not the same as one manager’s attitude…

So far i would guess it takes about 30-50 conversations over a minimum period of 3-5 weeks. But that’s just a guess based on empirical experiences in the past. Note i said experiences not data.



Looking at this after so much time, it reads like an incoherent rant. But that’s because

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.