Subsidized Services Department

This is one of many OrganizationalPathologies that may plague a company. I have encountered it many times in different forms. This is actually a mild version of a stronger pathology called ServicePolice.

The context is that of large organization, where a service department is subsidized by the company. High-level management evaluates its achievements, usually on budget grounds. Parties that receive the services (i.e. other departments of the same company) have little to no influence.

What is a "service department"?

In its good form, the service department will take pride in delivering high-quality services to its users, whom it sees as the real customers. This situation can endure, but the way money flows through the organization will not promote it. Worse, it will naturally push the department away from delivering high-quality services and towards low-cost services.

Because the service department is seen as a budget eater, it will eventually optimize for cost reduction. The most effective way to do this, is to simplify its tasks. As a direct consequence, the service level will drop. Assuming that the service department is there for a reason (the company needs these services) this will raise costs elsewhere in the organization: people cannot do their job well, they invest time arguing with the service department, or get frustrated and build their own workarounds to get their job done in spite of (instead of thanks to) the service department. Since these costs do not appear on any budget, they remain largely invisible.

Such workarounds seem to solve local problems, but they might backfire and cause the SubsidizedServiceDepartment? to evolve into a ServicePolice.

Anecdotal evidence: "We give [department X] our requirements, but we are never sure if they will be part of the end product or not. How they choose their requirements is a total mystery."

-- EelcoRommes