TopicKindle Profits Exposed Review
The responsibility - and power - for changing financial results lies in the hands of frontline managers. So, if we treat each department as a contribution centre, rather than a profit centre, then department managers are responsible only for the costs they can control, not the portion of overhead that is "allocated" to profit centres. In this way, managers - and individual employees - can be focused on improving the activities of their department, and increasing their team's motivation by producing results that are also good for the company.
But optimizing the number of employees doesn't necessarily mean keeping their numbers low. The authors point out that Wal-Mart has relatively low profits per employee and a relatively large number of employees. Their business model is an example of how increasing the number of employees rather than the profits per employee can also increase the value of the business. Highly automated systems and processes in logistics and at the point of sale has allowed Wal-Mart to cut their supply chain and inventory costs and allows them to quickly respond to emerging sales trends. Those, combined with low labour costs, support the size of their staff.