How does the control of foreign operations change as the enterprise grows?
What will be an ideal response?
• At its infancy, the foreign operation is generally run by a very centralized decision making process. The international entrepreneur relies on their limited circle of advisor and partners to aid in controlling operations at home for the international markets.
• As the enterprise grows, it is able to build more of a local network in the foreign country. The larger size and complexity of the business makes it more difficult for all decisions to be made back in the home office. At this point the local office becomes more independent and is free to make its own business decisions.
• Once this process of decentralization has expanded to several different markets, it becomes very difficult to control and manage as one office might be acting in conflict with another, and information is slow to make it back to the home office. At this point control is brought back to the headquarters and systems and controls are implemented to improve the communication structure and process.
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