Question

Linda Bells is the president of a car accessories company in Germany. In order to expand its business to Asia, she has decided to set up an overseas sales office in Hong Kong. Stephen Crag, the sales and marketing manager, is assigned to be relocated to Hong Kong to oversee the business there. Stephen has requested the president that this overseas sales office be decentralized to provide him with an opportunity to make timely decision in this new market.

a Explain why Stephen requested decentralization of authority in Hong Kong.

b What possible disadvantages could result from the decentralization of the sales and marketing function of the overseas office?

Answer 1

Answer:- Explain why Stephen requested decentralization of authority in Hong Kong.

One of the main distinguishing features of international marketing is that the customers of different regions have different requirements and tastes and preference. Apart from this, the marketing and sales practices which are employed in the home country may not be successful in the host country due to the reasons that the customers may have varied traits and interest in different marketing ploys,

Apart from this, the marketing manager will be more effective in dealing with the local competition if he is given the freedom of asking the decisions and it will also make the company be responsive of strategies of the competitors.

All the above-stated factors provide a reasoning and solid ground that the decentralization of authority in Hong Kong should be allowed.

Answer:- The main disadvantages of decentralization are as below:-

• The local business unit may not implement the strategies or tactics made by the company
• It will result in a lesser control over the local unit by the head branch.
• This can also result in the fragmentation of the organization and then the managers may show reluctance in working as a team.
• There can be the chances of misusing the given power and authority
• The company may lose the control over customer service and productivity