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Multi-divisional Structure

GNGary Namanya8y ago
How is top management's level of control a disadvantage in such a structure? Gary
kengarrettkengarrettTutor8y ago#1
Their problem is to coordinate divisions whilst not interfering with divisional heads' autonomy. Setting transfer prices is an example. Rather than instruct divisions about how many units to make, sell partially completed etc (such interference in commercial decisions is likely to be resented by dividional management), head office sets a transfer price which should manipulate divisions into making goal congruent decisions.
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