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Subsidiary management and subsidiarity

With agile practices in business on the minds of many CEOs, Hazel Davis examines which approach is better – having full subsidiarity or centralised management and procedures.

Globalisation and fast expansion can play havoc with traditional management structures. Take John Green, who works for a London publishing group. He says: “In the early 2000s, my boss was at the company’s New York office. His boss was in London and sat in the same room as me. And his boss in turn was a board director, based in New York. So the chain of command flipped across the Atlantic at every level. It was a disaster. The echo from the conference-call system made it almost impossible to hear or to talk.” This, he says, “was symptomatic of all intra-company communications. The company was, and is, split between locations in the UK, North America (a number of cities) and Asia. For most business units they were in one or the other, but quite a few were split between London and New York, as was the unit I was in. It didn’t work.” This scenario isn’t so unusual. Luckily, for managers like Green, centralisation is on the way out. 

This is an extract from the Business & Management Magazine, Issue 258, October 2017.  

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