Decentralization, goal-congruence, responsibility centres. Hexton Chemicals consists of seven operating divisions that each operate independently. The operating divisions are supported by a number ofsupport divisions such as R&D, labour relations, and environmen¬

tal management. The environmental management group consists of 20 environmental engineers. These engineers must seek out business from the operating divisions—that is, the projects they work on must be mutually agreed to and paid for by one ofthe operating divisions. Under Hexton’s rules, the environmental group is required to charge the syst^s^transi^e^p^cing"

operating divisions for environmental services at cost.

Required 1. Is die environmental management organization centralized or decentralized?
2. What type of responsibility centre is the environmental management group?
3. What benefits and problems do you see in structuring the environmental management group the way Hexton has? Does it lead to goal-congruence and motivation?