Question

The Eti Food company is a fast-growing Multnational Enterprise that manufactures and sells protein bars for consumption by serious athletes, such as marathoners and triathletes. The protein bars produced by Eti Food taste much better than the bars sold by other firms, which has led to an increase in sales. Managers and executives with Eti Food need to determine the best organizational structure for the young firm. Eti Food has subsidiaries in South Korea and Chile, while company headquarters are based in Los Angeles. Which of the following questions would be more important for Eti Food executives to evaluate when determining whether to centralize or decentralize the firm's structure?

a. What is the possibility of Eti Food establishing a subsidiary in India?
b. How much modification is needed for Eti Food products in South Korea and Chile?
c. How many athletes from each country participated in the Olympics?
d. What sports drinks are available and popular in Asia?

Answer 1

Answer: B. How much modification is needed for Eti Food products in South Korea and Chile?

Step-by-step explanation:

Centralization simply means when there's a hierarchical structure in place in an organization such that the decisions are taken by those at the top level of the organization. On the other hand, decentralization means that lowee level staffs can make decisions in the organization.

Based on the information given in the question, the question that would be more important for Eti Food executives to evaluate is "How much modification is needed for Eti Food products in South Korea and Chile?"

The modification in these countries will help the company to know whether to centralize or not. For example, in a case whereby there is minimal modification, centralization is beneficial.

Therefore, the correct option is B.