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Other companies that have centralized certain business activities include PayPal, Incorporated and the Royal Bank of Canada.

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In addition to the savings from centralizing the service function,

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Many companies also opt to place these hubs offshore in lower$-$cost countries, which can save $20\%$ to $35\%...$

However, not all companies believe that centralizing functions is the right choice for their organization. For example, Huntington Ingalls Industries, Incorporated, a military shipbuilding company, has three separate units, each with their own services.

Our philosophy is to have clear accountability to each of those sector presidents for their profit and loss, and that includes programmatic and financial performance....

Many companies, even those that choose to centralize, recognize that there are lost opportunities when, for example, finance staff are not located with operating managers. As one manager notes,

It's not all positive.... Certainly you get efficiencies, but you also lose connectivity.

Finally, there are other risks associated with centralization, especially to locations away from primary company operations. As described in the Business Application, "The Risks of Outsourcing a Service Center," in Chapter $11,$ when unexpected events $($such as the pandemic in $2020)$ arise, there may be regulatory or logistical issues in maintaining adequate services to the operating units.

Required:

What best describes the cost$($s$)$ Pernod Ricard SA likely hoped to reduce by removing some of the authority of local managers to source casks?

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