Explain why decisions are made where they among parents and subsidiary units of an international company?
Solution:
The international company often establishes a subsidiary unit of their business in another country. The decisions taken by the subsidiary or the parent organization purely depend on the organization and its products. It also greatly depends on the nature of the strategy that has been adopted by the organization, be it a global strategy or a multi-domestic strategy. The decisions made are mostly dependent on the nature of decisions that are under considerations.
The strategic decisions are generally floated by the parent organization which looks to strengthen their business worldwide by designing appropriate strategies for their business. These strategies are then communicated with intended objectives to the subsidiary units which the subsidiary units should fulfill to help the parent organization in achieving their strategic vision. Hence, the set of decisions for the subsidiary are based on the strategic visions of the parent company and should be underlined with those strategic objectives.
Hence, the decision making in the parent company and in their subsidiary business units are interdependent and not solely the duty of any single entity.
Explain why decisions are made where they among parents and subsidiary units of an international company?
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