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    Fed Decntralisation

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    anjalituli7587
    Federal decentralization requires that autonomous business units within a company are genuine profit-making businesses and contribute a genuine profit to the overall company as determined in the marketplace. It also requires clear definitions of top management's job to focus on direction, strategy, and key decisions while autonomous business units have maximum autonomy and responsibility. Centralized controls and common performance measurements are also needed.

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    Fed Decntralisation

    Uploaded by

    anjalituli7587
    3 views1 page
    Federal decentralization requires that autonomous business units within a company are genuine profit-making businesses and contribute a genuine profit to the overall company as determined in the marketplace. It also requires clear definitions of top management's job to focus on direction, strategy, and key decisions while autonomous business units have maximum autonomy and responsibility. Centralized controls and common performance measurements are also needed.

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    fed decntralisation

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    Federal decentralization requires that autonomous business units within a company are genuine profit-making businesses and contribute a genuine profit to the overall company as determined in the marketplace. It also requires clear definitions of top management's job to focus on direction, strategy, and key decisions while autonomous business units have maximum autonomy and responsibility. Centralized controls and common performance measurements are also needed.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    3 views1 page

    Fed Decntralisation

    Uploaded by

    anjalituli7587
    Federal decentralization requires that autonomous business units within a company are genuine profit-making businesses and contribute a genuine profit to the overall company as determined in the marketplace. It also requires clear definitions of top management's job to focus on direction, strategy, and key decisions while autonomous business units have maximum autonomy and responsibility. Centralized controls and common performance measurements are also needed.

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    © All Rights Reserved
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    of 1

    25685 01 8/24/04 9:31 AM Page 356

    22 november

    Federal Decentralization: Requirements


    As a minimum the unit must contribute a profit to the company
    rather than merely contribute to the profit of the company.

    F e d e ra l d e c e n tra liz a tio n h a s strin g e n t re q u ire m e n ts. Fe d e ra l d e c e n tra l-


    iz a tio n is a p p lic a b le o n ly w h e re a c o m p a n y c a n tru ly b e o rg a n iz e d in to
    a n u m b e r o f g e n u in e “ b u sin e sse s.” T h is is its b a sic lim ita tio n . A s a m in i-
    m u m th e u n it m u st c o n trib u te a p ro fi t to th e c o m p a n y . A n d it m u st b e a
    g e n u in e p ro fi t d e te rm in e d b y th e o b je c tiv e ju d g m e n t o f th e m a rk e tp la c e .
    Fe d e ra l d e c e n tra liz a tio n w ill w o rk o n ly if th e to p -m a n a g e m e n t jo b is
    c le a rly d e fi n e d a n d th o u g h t th ro u g h . Fe d e ra liz a tio n , if p ro p e rly a p p lie d ,
    m a k e s to p m a n a g e m e n t c a p a b le o f d o in g its o w n jo b p re c ise ly b e c a u se it
    d o e s n o t h a v e to w o rry a b o u t o p e ra tio n s, b u t c a n c o n c e n tra te o n d ire c tio n ,
    stra te g y , o b je c tiv e s, a n d k e y d e c isio n s fo r th e fu tu re . T h e fe d e ra l p rin c ip le
    d e m a n d s g re a t re sp o n sib ility fro m th e o p e ra tin g u n its, th e a u to n o m o u s b u si-
    n e sse s. T h e y a re g iv e n th e m a x im u m o f a u to n o m y ; a n d th is re q u ire s th a t th e y
    a ssu m e th e m a x im u m o f re sp o n sib ility . Fe d e ra l d e c e n tra liz a tio n re q u ire s
    c e n tra liz e d c o n tro ls a n d c o m m o n m e a su re m e n ts. B o th th e m a n a g e rs o f th e
    a u to n o m o u s b u sin e sse s a n d to p m a n a g e m e n t m u st k n o w w h a t is e x p e c te d o f
    e a c h b u sin e ss, w h a t is m e a n t b y “ p e rfo rm a n c e ,” a n d w h a t d e v e lo p m e n ts a re
    im p o rta n t. T o b e a b le to g iv e a u to n o m y o n e m u st h a v e c o n fi d e n c e . A n d th is
    re q u ire s c o n tro ls th a t m a k e o p in io n s u n n e c e ssa ry . A fe d e ra l u n it o f a c o m -
    p a n y is a u to n o m o u s, b u t it is n o t in d e p e n d e n t a n d sh o u ld n o t b e . Its a u to n -
    o m y is a m e a n s to w a rd b e tte r p e rfo rm a n c e fo r th e e n tire c o m p a n y .

    action point: E n su re th a t e x e c u tiv e s o f y o u r a u to n o m o u s u n its h a v e


    m a x im u m a u to n o m y a n d m a x im u m re sp o n sib ility . Im p le m e n t th is b y e s-
    ta b lish in g a sy ste m o f c o n tro ls th a t m a k e s p e rfo rm a n c e o r th e la c k o f p e r-
    fo rm a n c e v e ry e v id e n t.
    M a n a g e m e n t: T a sk s, R e sp o n sib ilitie s, P ra c tic e s

    [ 356 ]

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