An accounting and management concept in which a designated sub-unit or a company is held responsible for its own profit and/or loss. Conceptually an aid to organizational efficiency

Done well, it enables each unit to pursue effective strategies for dominance in targetted markets and develop core competency in focussed areas. Done poorly, it largely serves to ignite violent turf wars, inflict misery onto the staff of unaligned support departments, and focus the profit centers on internal politics and competition instead of the company's mission.

More often done poorly than well, I think.