Structure and Subsidiary Management

Question 1

Structure of corporation

Answer 1

The reporting relationships inside the firm that specify linkages among, people, functions and processes

Centralization vs. Decentralization

Organize functional areas, product lines, and geographic areas. Which factors to take into account, benefits from the structure, and potential drawbacks.

Question 2

Subsidiary management Definition + mistakes & their solution

Answer 2

Is about understanding divisions and how to integrate them into the organizational structure.

Mistakes:

• treat all in a similar way
• headquarter hierarchy syndrome

Solution:
An organizational mode of differentiated rather than homogenous subsidiary roles and of dispersed rather than concentrated reponsibilites

Question 3

Subsidiary management and Role of Subsidiaries

Answer 3

How to assess each subsidiary roles and best way to manage them:
Dimension: Strategic Importance of local environment and Competence of local organization

Strategic leader: Assists parent in developing and implementing strategy

Contributor: Subsidiary operates in a strategically unimportant market but it possesses a distinctive core competency

Implementer: Most subsidiaries fall into this category: They are very important as they generate funds.

Black hole: Has negligible market share in important markets where success is essential to maintain the global position. This is an undesirable position which is why MNC move resources out of there

ROLES EVOLVE!

Question 4

Structure and subsidiary management

Answer 4

Structure should be aligned with strategy to ensure successful strategy implementation.

What do the operations contribute?
How important are their operations?