Medici Bank

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  • Topic: House of Medici, Florence, Medici Bank
  • Pages : 3 (1088 words )
  • Download(s) : 72
  • Published : September 22, 2008
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When Cosimo di Medici took over the Medici Bank in 1434, the bank became world’s largest single business and the unofficial head of state of the Florentine republic. It had operations across Western Europe, the Middle East, and several agency relationships across Asia and Europe. Its diversified operations included financial services, whole sale distribution and manufacturing. Cosimo di Medici was a successful global manager through his ability to coordinate activities over long distances and national boundaries. He had the ability to identify and promote strong leaders which allowed him to decentralize the operations of the organization. Cosimo was also very successful at managing the relationships with political authorities in his home country. Much of Cosimo’s success as a global manager in the 15th century can be applied to global organizations in the 21st century. Under Cosimo's management, the Medici Bank diversified its operations and expanded into northern Europe, the Middle East and North Africa. The organization was structured into three divisions, each of which reported into a holding company managed directly by Cosimo and his general managers. Each division was arranged as a cascading series of partnerships. At the top were the partners, who functioned similar to a board of directors. Most partners were part of the Medici family. Below the partners was the central office, where general managers oversaw operations. The third level of the organization was the operating division. The three divisions interacted to some degree, but financially and structurally they were independent, answering only to the head of the firm. Cosimo maintained controls and coordination of the various subsidiaries through partnership agreements which clearly detailed the management of activities, functions and decision making ability of the managing partners. The structure significantly restricted the power of the subsidiaries. Cosimo set guiding policies that...
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