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CH 13 Q 4 - techniques which in turn wastes time and...

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For firms that are competing in an industry where global strategy is appropriate the best organizational strategy is that of a centralized approach. Centralization provides a strong core base for firms that are competing with a global strategy. Since firms that pursue such a strategy have operations spread across a wide base, they need to eliminate duplication of operations such as research and development. Since a firm may have several foreign operations, going on separately it will cause inconsistency. These inconsistencies will in turn cost the firm money and even slow down production and make cooperation between subsidiaries more difficult. When decisions are decentralized, lower level managers may make choices that are in variance to higher-level managers (Hill, 2007 p. 444). Also with decentralizing there is bound to be overlapping in
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Unformatted text preview: techniques, which in turn wastes time and resources on the corporations’ part that can easily be eliminated, by handling major innovations at its home base. Furthermore, this helps to make a strong corporate culture that is prevalent in all subsidiaries. Then at local levels, the regional managers have a large plan to follow which they can adapt to their own specific needs. In addition, concentrating power and authority to an individual or managerial team, centralization can give the means to executives to bring about major organizational changes in the firm (Hill, 2007 p. 444). Thus, centralization provides for a concrete foundation at the home, which can be easily modified to fit specific situations abroad. Hill, Charles W. International Business. Sixth edition. New York: McGraw-Hill, 2007....
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