Emerging strategic demands make organizational models based on interdependence the most appropriate form for headquarter-subsidiary relationships.

Question

Quizplus · Accepted Answer

(Emerging strategic demands make: (a) organizational models based on interdependence the most appropriate form for headquarter-subsidiary relationships; and, (b) organizational models based on simple inter-unit independence or dependence inappropriate.Independent units risk being targetted by competitors whose coordinated global approach gives them the following two advantages: (i) the ability to integrate scale-efficient operations and; (ii) the opportunity to cross-subsidize losses from one market with funds generated by profitable operations in other markets.Dependent units run the risk of being unable to respond effectively to strong national competitors or to sense potentially important local market or technical intelligence).

Emerging Strategic Demands Make Organizational Models Based on Interdependence the Most