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To worry about minor details of management of each of divisions.
Managing directors of various divisions can have uncontrolled liberty in management
"Internal" affairs of the division. To people in whom management trusts
Various divisions and branches, the general manager gives one
Unique instructions: "Receive maximal profit". And studying
To the reporting shows to it, how much successfully they acted, executing it
On a major concern many divisions make only details or
Half-finished products which are not sold directly, and are used by others
Divisions at end production manufacturing. This fact does not change
Described above conditions. The general manager compares costs on
Production of such details and half-finished products, with the prices which it should
To pay, if purchased them at other factories. It always faces with
Question: whether "production of these things in our own shops Will pay off? Not
Whether it was more favourable to purchase them at other factories specialising on them
Thus, within the limits of the enterprise focused on profit
Responsibility can be divided. Each managing director is responsible for work
The division. It is its merit if reports testify to reception
Profits, and its fault if they testify to losses. Own
Egoistical interests force it to run business of the division with
Limiting attention and diligence. In case of losses, it will appear their victim. It
Will replace with other person from whom the general manager waits for the big
Successes, or will close all division. Anyway, from its services
Will refuse, and it will lose the work. If he achieves profit taking,
Its income will be increased or, at least, to it will not threaten it
Loss. The managing director of the right to a part of profit of the has or has no
Divisions, not so it is important for its personal interest in results
Division activity. Its destiny in any case closely related with destiny
Its divisions. Working on it, it works not only on the owner,
But also on itself.
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