Perceived Chargeback System Fairness in Decentralized Organizations: An Examination of the Issues.

Author List: Hufnagel, Ellen M.; Birnberg, Jacob G.;
MIS Quarterly, 1989, Volume 13, Issue 4, Page 415-430.
Problems can arise in decentralized organizations when usage-based chargeback systems are implemented to control computing resources. A case study of a company that is changing from negotiated pricing to full cost pricing illustrates the fact that concerns about fairness can arise not only with respect to specific characteristics of the chargeback system (e.g., understandability, controllability), but also as a result of central management policies governing internal transactions between the users and MIS. In particular, this examination identifies three factors that affect the fairness perceptions of autonomous divisional managers: (1) a high degree of interdependence between user divisions and MIS such that the behavior of MIS could have a significant impact on divisional performance; (2) restrictions on divisional managers' freedom to purchase computer services from external sources; and (3) the tendency for full cost to exceed market prices early in the life of a data center. A dual pricing approach may be an interim solution to reduce conflict and improve user perceptions of fairness.
Keywords: Chargeback systems; chargeout systems; cost allocation; resource allocation; transfer pricing
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#63 0.187 mis problems article systems management edp managers organizations ;br> data survey application examines need experiences recent organization reports departments oriented
#214 0.148 resource resources allocation chargeback manager effectiveness problem firms case gap allocating diverse dependence just bridge cooperative criticality acquisition duplication extent
#223 0.098 insurance companies growth portfolios intensity company life portfolio industry newly vulnerable terms composition operating implemented factors asset focus disaggregation choices
#92 0.079 equity conventional punishment justice wisdom focus behavior fairness compliance suggest theory significant certainty misuse reward settings behavioral mandatory drawing widely
#62 0.077 price buyers sellers pricing market prices seller offer goods profits buyer two-sided preferences purchase intermediary traditional marketplace decisions intermediaries selling
#151 0.072 costs cost switching reduce transaction increase benefits time economic production transactions savings reduction impact services reduced affect expected optimal associated
#248 0.070 computing end-user center support euc centers management provided users user services organizations end satisfaction applications article ibm step field policies
#58 0.053 internal external audit auditing results sources closure auditors study control bridging appears integrity manager effectiveness auditor controls facilitating boundaries potential