Enhanced Computers specializes in rebuilding computers. Recently reorganized into geographic divisions, the Southern division headed by Dan Unowsky is outperforming the other divisions in sales and profits. However, corporate executives have noticed that Unowsky no longer sends refurbished computers to other divisions, and he has instituted special warranties and pricing systems unavailable in the rest of the company. Should Unowsky be promoted or fired?
What will be an ideal response?
One advantage of decentralization is the ability to compare policies across geographic areas to determine what policies work best for a company. The Southern division is outperforming the other divisions in both sales and profits. The southern division's manager may have discovered better ways to price computers. The warranties may be a way of creditably signaling that Enhanced Computers products are durable. Increased sales volume explains why Unowsky no longer sends refurbished computers to other geographical divisions. He may be selling all the refurbished units. Therefore, Unowsky should be promoted.
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