Both Biondo and Cramer are large public corporations with subsidiaries throughout the world. Biondo uses a centralized approach and makes most of the decisions for its subsidiaries. Cramer uses a decentralized approach and its subsidiaries make many of their own decisions. a. Would the agency problem be more pronounced for Biondo or Cramer? Explain. b. Would agency costs likely be higher for Biondo or Cramer? Why? c. Discuss a major advantage and a major disadvantage to a centralized approach such as Biondo uses d. Discuss a major advantage and a major disadvantage to a decentralized approach such as Cramer uses. e. Which is better, a centralized or decentralized approach?
Both Biondo and Cramer are large public corporations with subsidiaries throughout the world. Biondo uses a centralized approach and makes most of the decisions for its subsidiaries. Cramer uses a decentralized approach and its subsidiaries make many of their own decisions. a. Would the agency problem be more pronounced for Biondo or Cramer? Explain. b. Would agency costs likely be higher for Biondo or Cramer? Why? c. Discuss a major advantage and a major disadvantage to a centralized approach such as Biondo uses d. Discuss a major advantage and a major disadvantage to a decentralized approach such as Cramer uses. e. Which is better, a centralized or decentralized approach?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
Related questions
Question
Both Biondo and Cramer are large public corporations with subsidiaries throughout the world. Biondo uses a centralized approach and makes most of the decisions for its subsidiaries. Cramer uses a decentralized approach and its subsidiaries make many of their own decisions.
a. Would the agency problem be more pronounced for Biondo or Cramer? Explain.
b. Would agency costs likely be higher for Biondo or Cramer? Why?
c. Discuss a major advantage and a major disadvantage to a centralized approach such as Biondo uses
d. Discuss a major advantage and a major disadvantage to a decentralized approach such as Cramer uses.
e. Which is better, a centralized or decentralized approach?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.