What are the major advantages and disadvantages for centralizing or decentralizing a MNE? What are the factors that support centralization or decentralization? In your estimation what system works best? Why?
Centralizing or decentralizing a MNE:
Centralization of the MNE is the process where the authority and power of an organization lies with the Head office of the company. This power includes planning, decision-making and delegating authority and other important business activities. In this type of arrangement the top management takes all the important decisions without getting the lower management involved in this process. These decisions are enforced on the lower tiers of the organization (Daniels, Radebaugh & Sullivan, 2009).
Decentralization is becoming common these days due to growing organization sizes. In large size organizations, power is distributed at different levels in order to run the organization efficiently. In a decentralized arrangement, the organization level and middle level of the management has some power within them, they also have decision making power at local levels.
Advantages of ...
The expert examines the major advantages and disadvantages for centralizing or decentralizing MNE. What systems works best is determined.