As a minimum the unit must contribute a profit to the company rather than merely contribute to the profit of the company.
Federal decentralization has stringent requirements. Federal decentralization is applicable only where a company can truly be organized into a number of genuine “businesses.” This is its basic limitation. As a minimum the unit must contribute a profit to the company. And it must be a genuine profit determined by the objective judgment of the marketplace.
Federal decentralization will work only if the top-management job is clearly defined and thought through. Federalization, if properly applied, makes top management capable of doing its own job precisely because it does ...
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