Chapter 10 - Organizational Design and Control
6. It is obvious that in formulating new strategies, management may uncover a need to
change its organization. Can you describe some situations in which the reverse may be
The reverse is instead of strategic planning driving change, another force drives organizational
change. Let’s say the firm makes an acquisition whose business is significantly different from
7. In determining whether decisions will be made by the parent company or by its
subsidiaries, what are the considerations when equipment and products are standardized
worldwide rather than tailored to individual national circumstances and markets?
If the subsidiary’s market is large and different enough, it may make economic sense to design
and produce equipment and products for that one market. Management of the subsidiary would
8. Regarding issues of control in an international company:
a. What are some decisions that could result in detriment for a subsidiary but greater
benefit for the enterprise as a whole?
Decisions to channel business through a low tax country subsidiary rather than a high tax
b. In such circumstances, where will the decision be made—at IC headquarters or at the
.What measures can be utilized to control subsidiaries that are less than 100 percent
owned by the firm or joint venture partners in which the firm has no ownership?
10. Some companies use standardized organizational controls across their entire
organization, in that the same control systems are used for each unit or operation
worldwide. For example, companies such as Starbucks, Kentucky Fried Chicken, or
McDonald’s apply the same rigid quality controls throughout all aspects of their
organizations, even as they expand internationally. Why would a company such as these
impose rigorous corporate quality standards, regardless of the country in which it
operates? What modifications in these quality standards, if any, should the company
permit because of differences across nations or regions of the world? Why is the company
allowing these modifications to occur?
Companies might implement rigorous quality standards, regardless of country of operation, if