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CH 13 closing Q 4

CH 13 closing Q 4 - the home office was only concerned with...

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The reason that it took Black & Decker two decades to reorganize their internal structure and strategy was due to the high degree of decentralization. When Black & Decker began to expand internationally in the 1950s and 1960s and set up wholly owned subsidiaries thus, giving them the rights to manufacture, develop, and market their products (Hill, 2007 p. 475). This is what caused major problems for Black & Decker since they were using so much decentralization quick reorganization was impossibility. In any firm, totally, reorganization of internal structure will be a daunting task however; in a situation where each subsidiary is acting as its own company, it is especially difficult. In addition, allowing each newly established foreign base to develop independently was a mistake as well. For there was bound to be duplication in research and development thus wasting precious time and money. Furthermore, there was total lack of communication between subsidiaries due to the fact they were wholly owned and there was not need for it. Thus,
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Unformatted text preview: the home office was only concerned with profits since at the time Black & Decker had a near monopoly in the market. Therefore, their own complacency allowed competition to get the upper hand and force them to reorganize. This is why even by the 1990’s the reorganization had not gone far enough to compensate for other retailers entering the tool market. Black & Decker then shut down many other factories and unlike before, where even after their first wave of reorganization manufacturing was in the subsidiary that developed the product it was now centralizing production in China and Mexico (Hill, 2007 p. 475). Thus, gradually Black & Decker took on a more centralized and global strategies to better compete and control their subsidiaries in the more global economy of the present. Hill, Charles W. International Business. Sixth edition. New York: McGraw-Hill, 2007....
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  • Spring '11
  • Staff
  • Subsidiary, Berkshire Hathaway, Parent company, Black & Decker, Wholly Owned Subsidiaries, decentralization quick reorganization

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