Analysis of Rhodes Industries

Expansion and internationalization strategies employed by firms come with benefits and challenges. While increased revenues tend to be a definite advantage, organizing the branches and subsidiaries of a firm scattered across the globe often presents challenges, primarily in reporting and communication. The endeavour may also foster internal competition among the subsidiaries the firm, as witnessed by the Rhode Industries (RI) case study. This analysis explores the implications of changes recommended to the brand’s CEO.

Competitiveness and Adaptivity of Subsidiaries through forced coordination

Forced coordination between subsidiaries would have both advantages and disadvantages. Firstly, forcing coordination would increase communication throughout the firm. Doing so would enable subsidiaries to efficiently share information about market changes, technological and innovative developments, as well as new product ideas. In so doing, it would allow the top management to make strategic decisions to increase competitiveness.

Similarly, forced coordination promises to boost economies of scale while increasing investment funds through reduced costs of production. Equally, it would allow the top management to formulate collective goals and objectives, hence enabling all the to subsidiaries work towards achieving a similar aim. Daft (2015) states, for companies to be successful, they should mould their internal environments to match external factors. This situation implies that Rhodes Industries ensures that the firm is working towards a single direction from top to bottom.

On the downside, however, subsidiaries may encounter a problem with adapting to internal and external changes where the leadership forces coordination. It is critical to note that each subsidiary is in a location that is economically, politically, and culturally unique to the other. Thus, a reaction to environmental or internal changes in one place would have different results to another. This situation could lead to bottlenecks in the spearheading of processes. Mainly, as the operations by the brand are vast, the management of the different subsidiaries may not perceive the same issue similarly.

Changing habits of Subsidiary managers to match the global environment

Generally, habits are not easy to change, primarily since they build upon business practices over a long period. From the case, it is evident that Rhodes Industries has been in existence for a long time. Hence, its culture is well established. However, it is not the best for the current environment. As such, the business managers must initiate change and align subsidiary managers’ habits to match those needed by the global climate. The culture must then change and correspond to operational processes that focus on overall corporate growth.

A strategy for changing the subsidiary managers’ habits would be through involvement in decision-making processes (Draft, 2015). This approach ensures that the subsidiary managers own the vision of the company, which they have in mind while creating strategic goals for their units. Furthermore, involvement allows the subsidiary manager to establish the weaknesses and strengths in their areas. Participation also becomes a source of motivation for changing habits from a local to global perspectives. Since they feel part of the decision-making process, they are more likely to work towards the uniform goal created rather than their objectives, changing habits in the process. Involvement provides a global perspective to the managers while giving them the autonomy to make decisions regarding their units, eliminating the feeling of coerciveness to change, which would more likely increase resistance. The business managers, on the other hand, will have an opportunity to understand subsidiary managers, their present conditions, and needs enabling them the chance to make better company policies and judgments to change the habits of subsidiary managers.

Appointing Product Director Coordinators as a first step

It is a better approach to appoint Product Directors first, as this will help with initiating change at Rhode Industries. A Product Director would be responsible for coordinating technology transfer as well as product manufacturing across the globe. Additionally, the firm should have a product director for each of its primary product lines with the capabilities of carrying their duties worldwide (Draft, 2015). As a first step, this will allow the company to identify each area of its operations and innovation since the departments will have teams who will move to various subsidiaries to obtain and transfer information, technology, and improvements. This approach will bring more significant change quickly and effectively without necessarily disrupting the firm’s organizational structure.

Appointing Product Directors first, as well as establishing associated departments and teams, will increase understanding of each subsidiary, how it operates, strengths and weaknesses as well as the level of innovation. The information obtained from each line can then be applied to the decision-making process of the organization engineering even more significant change. In return, the decisions can help streamline the organization from top to bottom, eliminating the individuality of subsidiaries while encouraging uniformity, and increasing the efficiency of Rhode Industries as a whole. However, this should only be a first step as they move towards establishing a Rhode Industries that have a streamlined worldwide product structure.

Conclusion

Rhode Industries CEO Javier’s questions have merit as they indicate which directions the firm can take to have product coordination while at the same time exposing the weaknesses and changes that such strategies need. Firstly coordination would increase competitiveness, although it would reduce adaptivity due to different environments in which the subsidiaries operate. On the other hand, it is possible to change the habits of subsidiary managers to embody a global perspective, although this can best occur through involving them in decision making. Finally, appointing a Product Director Coordinator as a first step would encourage more understanding of all subsidiaries and encourage more profound change.

Reference

Draft, R. L. (2015). Organizational Theory and Design (12th ed.). Florence: Cengage Learning, Inc.