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ACCA Applied Knowledge · Business and Technology · Business organisational structure

Orion Group is a multinational selling to very different markets in 12 countries, with fast-changing local tastes and experienced country managers. Its board is worried about financial reporting risk and brand reputation. Which approach is most appropriate?

Orion should decentralise marketing and product decisions to experienced country managers, who understand local tastes, while centralising financial reporting and brand standards to control group-wide risk. This hybrid fits diverse markets while maintaining consistency where errors would harm the whole group.

  1. AFull centralisation of all decisions at head office
  2. BFull decentralisation of all decisions including financial reporting policies
  3. CDecentralise marketing and product decisions to country managers while centralising financial reporting and brand standardsCorrect
  4. DCentralise marketing and product decisions but decentralise financial reporting

Explanation

Diverse, fast-changing markets and capable local managers favour decentralising marketing and product decisions. Financial reporting consistency and brand reputation are group-wide risks that need central control. Full centralisation ignores local needs, full decentralisation ignores group risk, and option D reverses the logic.

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