Global Supply Chain Management

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Global Supply Chain Management Control - Riordan

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Compare and contrast decision making at headquarters and at foreign subsidiary locations. When decision making is at headquarters there are more management levels with narrow span of control. There is less freedom with employees at foreign locations to make decisions. On the other hand if decision making is vested in employees at foreign subsidiary locations, there are fewer levels of management with wide spans of control and this provide greater freedom to employees at foreign subsidiary locations to make decisions. Riordan will find decision making at foreign subsidiary locations more useful because it requires fewer managers. Riordan should locate its decision making close to the customer. Remember, Riordan is a customer oriented company. if the decision making is close to the customers the company will become more responsive to the customers. Those employees at the lower level that are in direct touch with Riordan customers should be given the greatest authority and that will improve the performance of Riordan.

Evaluate major means of control; If decision making is centralized at headquarters it means there is centralized operational control and strategic control. The headquarters is able to closely monitor the actions of the subsidiary and make decisions when required. The first means of control is output control, in case there are two forms of control that are exercised, one is control related to profit and the other is related to volume of sales and supply chain. The second means of control is bureaucratic control. This is related to control over procedures and processes. Riordan may use this control for ensuring that the company's policies are followed in the injection molding process and the products that are produced are of the specified quality. The third means of control is over decision making. The two extreme situations have already been discussed, that is Riordan may insist that some decisions should be made at its headquarters and others may be made at foreign ...