shared service center. A common mistake is to grant the shared service center a status equal to that of business unit or division. This creates confusion as it conflicts with the primacy of the units responsible for managing market opportunities. Also shared service centers should not report to their corresponding corporate staff department (with the exception of the financial shared service center) as this creates the risk that the corporate staff department uses the shared service centers to deploy functional authorities. Managers of business units will then perceive the shared service center as an implicit control device, impairing the quality of services. It is equally important that deploying a shared service center in a multi-unit organization makes the executive board accountable to the managers of the business unit for the performance of the shared service centers. This is because the use of the services of the shared service centers is mandatory, the executive board reduces the scope of resources of the business units, whilst the accountability of the manager of the business unit for business performance remains unchanged. Deployment The deployment of shared service centers requires that the managers of the business units develop the competence to be a professional principal of the shared service, knowing how to articulate their demand and what value services have to their business. In the accounting system a shared service usually will have the status of cost and investment center. As some shared-service centers, e.g. for purchasing and for customer service, dependent on their activities, actually perform value-creating activities, to the judgement of fiscal authorities, transborder transfer prices may be subject to taxation. Cost charge With respect to cost charge out a critical issue is that costs charged based on activity based costing (ABC) do not provide an incentive to the shared service center to be efficient because ABC implies that the costs of non-used over capacity will be charged out as well. It is better to cost charge out on time-driven activity based costing. The superior solution for cost charge out is cost allocation based on the deployment of a corporate wide general ledger, which includes the recording of the internal use of resources for products and customers. This method eliminates the effect of double marginalization inherent to transfer prices and subsequently improves the performance of the firm. Standardized processes Another critical issue in shared service centers is the way processes are standardized.