As a consultant for large corporations my startup is considering recommending the following:
Imagine that you have a large business with several thousand employees. Usually such a business has budgets for each department and may or may not be split up into strategic business units.
Imagine that the upper management set a value (in money) on the services that each team delivered. Say for example the cantine (which offers food for free as is often the case in Denmark). The cantine would be obligated to make surveys of the employees and make the employees rate the food. Lets say that the food is currently rated at three stars. The upper management could then decide that increasing the rating to four stars is worth 2$ per meal to the company (due to employee satisfaction etc.). This means that if the manager for the cantine believes that he/she can achieve this rise in ratings, he automatically has a budget of 2$ extra per meal. He/she does not need to ask the upper management for approval for using this money, even if it is not in his/her budget. If he/she delivers the increase for just 1.8$ extra, then this is very good, if he/she spends more than 2$, then this is bad.
The idea is to do this for most teams in a whole organization. The purpose of this is to enable lower management to act in a way that is the best for the company without asking for approval all the time.
My question: Could this method work? Do you know any examples of such a thing. I believe that profit centers are not an appropriate description of this.