Published by:
Harvard Business Publishing
Length: 7 pages
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Abstract
The results of the authors'' study of 12 organizations'' headquarters and their relations with their divisions showed that the degree of autonomy a business unit has, how line responsibilities are structured, and its incentive compensation program''s design have an important impact on unit performance. Executives need to spend time defining the correct relationship. Managers must also be aware that factors other than market share and cash flow can affect a unit''s performance.
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Abstract
The results of the authors'' study of 12 organizations'' headquarters and their relations with their divisions showed that the degree of autonomy a business unit has, how line responsibilities are structured, and its incentive compensation program''s design have an important impact on unit performance. Executives need to spend time defining the correct relationship. Managers must also be aware that factors other than market share and cash flow can affect a unit''s performance.