Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What type of organisation provides services to the entire organisation?

1. Decentralised units

2. Shared service organisations

3. Autonomous divisions

4. Profit centres

The correct answer is: Shared service organisations

Shared service organisations are designed to provide essential services to the entire organisation efficiently, often aiming to standardize processes and reduce costs. These units consolidate resources such as human resources, IT, finance, and customer service to serve multiple departments or divisions within a larger entity. By leveraging economies of scale, shared service organisations can enhance service quality and streamline operations, which is beneficial for the overall efficiency and effectiveness of the organisation. In contrast, decentralised units typically operate with a degree of autonomy, executing their own decision-making processes tailored to their specific needs rather than serving the entire organisation. Autonomous divisions function independently, focusing on their own goals and operations, while profit centres are oriented towards generating revenue independently, tracking their income and costs but not necessary providing services across the organisation. Therefore, shared service organisations uniquely align with the concept of providing collective services across various departments, distinguishing them from other types of organisational structures.