chapter  11
14 Pages

Profit Centers

Organizations are converting the operation of the training and development department to that of a profit center rather than a cost center. Under the profit center arrangement, the department charges for products and services, using a competitive fee schedule. Its clients, the managers in the organization, have the option of purchasing programs and services from the training and development department or from external suppliers. Revenues generated from program fees offset operating expenses. Revenue that exceeds the operating cost results in profit for the organization.