Linda Bells is the president of a car accessories company is Germany. In order t

Question

Linda Bells is the president of a car accessories company is 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 marking 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?

Explanation / Answer

a. Local markets may have different dynamics such as consumer preference, competition etc. Accordingly, business models/products/ marketing communication /pricing etc.needs customization. Often, this customization needs to be fast so as to be reactive and responsive to the local competition. Hence, decentralization has been requested, specially since market of Hongkong is very different from Germany.

b . Disadvantages of decentralized sales and marketing

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