Centralized and Decentralized Decision Making
Centralized decision making is an approach in which, organization make decision without consulting with other members within the organization. Top level managers make decisions and convey to lower level managers. In case of decentralized decision making, organization make decisions by discussing with other members. For managing international operations, organization should use decentralized decision making (Hirschey, 2008). With the help of decentralized decision making, Kranden & Associates can become able to manage its various overseas units and handle the setup operations. Decentralized decision making helps organization in managing different departments in an effective manner.
In order to manage the international operations, decentralized decision making is necessary. It is identified that, managers in the headquarter delegate the authority to the managers in their subsidiary units. This will be helpful in reducing the burden of decision making and companies in different countries can be managed easily. In case of centralized decision making, organization cannot be able to take quick decisions. Managers in the subsidiary units have to wait for the decision by top level managers (Ferrel, Fraedrich & Ferrel, 2009). Therefore, it is necessary for the company to focus towards decentralized decisions making.
Direct and Indirect Control
Kranden & Associates operate in international market and provide efficient services to the customers. In international market, direct control is necessary in comparison to indirect control. In case of direct control, organization controls all the departments from the top level managers and do not pass any information from different departments (Bennett, Lance & Woehr, 2006). In this system, organization does not make any layers for transferring the information. At the same time, indirect control is the method in which, organization transfers information through different layers. Moreover, all the departments are handled by the managers in their department.
Company should make use of indirect control method for managing its operations. It is identified that Kranden & Associates expanded its business in different countries such as Brazil, France, Paris, US and Europe. Therefore, company cannot be able to manage all the departments through headquarter (Tonchia & Quagini, 2010). It is necessary for the company to focus towards indirect control and manage the departments efficiently. Kranden & Associates should use both controlling methods for handling different departments.
Kranden & Associates should use different types of performance measures in order to control its international operations. Some kind of performance measures are balance scorecard, outcome measure, 360 Degree, and process measure. In case of balance scorecard, company set certain standards on the basis of which, company measure its employees’ performance and give them appraisals. In order to control its international operations, the company should focus towards the outcome of employees and accordingly efforts should be made for further improvement (Miner, 2007). Company can make comparison between the outcomes and stated standards and take corrective actions if required.
360 degree performance measurement tool is also an effective approach for handling international operations. In this approach, information is taken from other employees about the performance of their team members. Through analysis, it is identified that company should measure its performance at regular interval. It is because, company has to make adjustments according to the changing external market conditions and accept the changing cultures (Hutzschenreuter, 2009). Therefore, organization should make use of suitable approaches for managing different activities and international operations.
Bennett, W., Lance, C.E. & Woehr, D.J. (2006). Performance Measurement: Current Perspectives and Future Challenges. USA: Routledge.
Ferrel, O.C., Fraedrich, J. & Ferrel, L. (2009) Business Ethics: Ethical Decision Making and Cases. USA: Cengage Learning.
Hirschey, M. (2008). Managerial Economics. USA: Cengage Learning.
Hutzschenreuter, J. (2009). Management Control In Small and Medium-Sized Enterprises. USA: Springer.
Miner, J.B. (2007). Organizational Behavior Four: From theory to practice. USA: M.E. Sharpe.
Tonchia, S. & Quagini, L. (2010) Performance Measurement: Linking Balanced Scorecard to Business Intelligence. USA: Springer.