Question : Case Study 3:
LMN Corporation is a multinational conglomerate with various business units. The company has a decentralized management structure and wants to ensure effective coordination among its units.
Question:
What type of control is LMN Corporation most likely to implement to foster coordination?
Option 1: Bureaucratic control.
Option 2: Market control.
Option 3: Clan control.
Option 4: Decentralized control.
Correct Answer: Decentralized control.
Solution : The correct answer is (d) Decentralized control.
In a decentralized control system, decision-making authority and responsibility are distributed among various business units or divisions. This allows each unit to make decisions that are best suited for its specific context, while still adhering to overall corporate objectives. Decentralized control can foster coordination by empowering individual units to adapt to local conditions while maintaining alignment with the corporation's overarching goals and strategies. It promotes flexibility, quicker decision-making, and responsiveness to local market dynamics, all of which can contribute to effective coordination within a decentralized structure.
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