Decentralisation, goal congruence, responsibility centres. (15 minutes) Montaigne-Chimie, SA, consists of seven operating divisions that each operate independently. The operating divisions are supported by a number of support divisions such as R&D, labour relations, and environmental 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 of the operating divisions.

Under Montaigne-Chimie’s rules, the environmental group is required to charge the operating divisions for environmental services at cost.

REQUIRED Is the environmental management organisation centralised or decentralised?

What type of responsibility centre is the environmental management group?

What benefits and problems do you see in structuring the environmental management group the way Montaigne-Chimie has? Does it lead to goal congruence and motivation? jui4