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AB Chemical Ltd. includes 7 independently operating divisions. These divisions receive supports from technical groups, namely R&D group, HRM group and environmental group. The environmental group has 20 experts on environment. They have to search consulting opportunities from projects of the divisions. The external competitors with the environmental group are scare because of uniqueness of environmental aspects of AB.
According to AB regulations, the environmental group charges the receiving divisions the consulting fee which is based on the costs of environmental consulting services provided.
Required:
Identify the type of responsibility center of the environmental group? How is management control of the group, and management control of AB over this group?
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