Kcc Divisionalization Case Study

Published: 2021-06-29 06:31:41
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Case study-Kranworth Chair Corporation

Q1.To some extent, I think they don't go far enough. More departments should be decentralized according to the early experience.

The "Supply Chain and Quality Control" should be decentralized. Because I think according to different market demand, they should supply to the two divisions different product, the "supply chain and the quality control" is quite different for the two divisions. Joe complains about the late deliveries and missed sales, I think it's partly because the supply chain is not decentralized enough. As a result, the two divisions cannot decide which vendor they want to corporate with and they don't have the control of the oversea venders. But if they "decentralize the supply chain and quality control", the cost will be increased. Actually, it's the main problem of decentralization in my opinion. The company should balance the cost and the outcome of the decentralization and decide which part should be decentralized.

There is complain about the D&R. D&R allocates the cost equally to the two divisions, but both the two divisions are not satisfied. "Custom division" thinks the R&D just copy the competitors' idea, "Retail division" believes they know the demand better than the division. So there are conflicts on both allocation of the cost and to satisfy the different demands. If the R&D be decentralized, the conflicts may be avoided.

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