Designing a Hybrid Global Sourcing Strategy

Topics: Supply chain management, Decentralization, Management Pages: 10 (2800 words) Published: November 20, 2011
SCM Main Assignment
Subject: Supply Chain Management
Class: Logistics
Student: Peng Yu

After gone through the case of “designing a hybrid global sourcing strategy” I felt that the hybrid organization and hybrid sourcing is doable and it should look like what I write at the following contents.

Since the task force decided to help Triton transforms into a hybrid organization as well as its purchasing system, they must define what hybrid organization is and what hybrid structure specialize in; advantages of using hybrid structure; how does hybrid organization operates in sourcing efficiency in order to help Triton survives in a behemoth-dominated world.

In this case the hybrid structure is attempt to combine the pros of both centralized structure and decentralized structure. The advantages and disadvantages of centralized versus decentralized organizational structures lies greatly in the inherent qualities and effects of the structures themselves. If top managers make the organization's key decisions with little or no input from below, then the organization is centralized. Companies which wish to consolidate power and decision-making abilities at the top of the organizational chart, tend to be centralized organizations. As the textbook states, this is helpful for companies who need to be stable or are facing a crisis and need one source of decision-making to lead them. These sorts of organizations are becoming rarer, as employees become smarter and organizations become larger. Based on my personal opinion centralized structures are becoming rare because of their many disadvantages. Due to power being consolidated at the top of the organization, risk is great if the top of the organization becomes incapable of leading the organization (death, illness, or massive organizational size causing a weak span of control). Employees also will feel less motivated to perform for the organization as they will not have an avenue for sharing their ideas on how to improve the organization.

Decentralized organizations are becoming more popular as the ability for organizations to decentralize increases. Decentralization allows organizations to take advantage of division of labor by sharing decision-making across the organization. It also empowers employees and allows them to improve their performance by being able to act to improve deficient or inefficient areas immediately without approval from the top of the organization. Another advantage of decentralization is allowing for the managers of business areas to actually use their first hand knowledge and experience to improve their areas. By trusting the individuals within the organization to obtain accurate information and use their minds to provide appropriate analysis.

The advantages and disadvantages of centralized structure and decentralized structure can be summarized as follow: The pros of centralized structure are increase leverage; reduced duplication; facilitates standardization; enable specialization; greater control.

The cons of centralized structure are increase bureaucracy; reduced flexibility; can lose touch with reality.

The pros of decentralized structure are knowledge of local needs; better local relationships; greater responsiveness.

The cons of decentralized structure are reduce leverage; lead to duplication; is relatively inefficient.

According to the case the task force had identified several companies that had recently shifted from decentralized to centralize with dramatic cost savings. A consulting study commissioned by Triton revealed that a centralized organization would reduce Triton’s purchasing costs by 7 to 10 percent. However, as the task force started to implement the centralized plan they soon found out that there are many resists came from inside and outside of Triton. Therefore, the task force now is focusing on how to build a hybrid organization as well as its purchasing system. Therefore, they must identify...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • global sourcing Essay
  • Global Sourcing Essay
  • Global Strategy Essay
  • Global Strategy Essay
  • global biz strategy Essay
  • Global Strategy Essay
  • Starbucks Global Strategy Essay
  • Global Strategy Essay

Become a StudyMode Member

Sign Up - It's Free