Which operational approach has each country or unit using administrative services from a central source?

Which operational approach has each country or unit using administrative services from a central source?

• A. Centralization
• B. Shared services
• C. Decentralization
• D. Outsourcing

Answer: (B)

Shared services means a central unit provides routine administrative functions to multiple units or countries. This setup brings the work together in one place—like payroll, benefits, HRIS, and other back-office tasks—so each unit can draw those services from the central source rather than running its own separate systems. The result is more consistency, faster processing, and economies of scale, while units retain their own leadership for strategic decisions. This fits the scenario where every country or unit uses the same central source for administrative services. Centralization, by contrast, is more about pulling decision-making authority into a single location; decentralization spreads authority to units; and outsourcing involves contracting work to external vendors rather than a central internal provider.

Shared services means a central unit provides routine administrative functions to multiple units or countries. This setup brings the work together in one place—like payroll, benefits, HRIS, and other back-office tasks—so each unit can draw those services from the central source rather than running its own separate systems. The result is more consistency, faster processing, and economies of scale, while units retain their own leadership for strategic decisions.

This fits the scenario where every country or unit uses the same central source for administrative services. Centralization, by contrast, is more about pulling decision-making authority into a single location; decentralization spreads authority to units; and outsourcing involves contracting work to external vendors rather than a central internal provider.