Reference no: EM133048087

Question - Xerox Corporation has been an innovator in its responsibility-accounting system. In one initiative, management changed the responsibility-centre orientation of its Logistics and Distribution Department from a cost centre to a profit centre. The department manages the inventories and provides other logistical services to the company's Business Systems Group. Formerly, the manager of the Logistics and Distribution Department was held accountable for adherence to an operating expense budget. Now the department "sells" its services to the company's other segments, and the department's manager is evaluated partially on the basis of the department's profit. Xerox Corporation's management feels that the change has been beneficial. The change has resulted in more innovative thinking in the development and has moved decision making down to lower levels in the company. Comment on the new responsibility-centre designation for the Logistics and Distribution Department.