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| Topic: |
Business
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| Number of pages / Number of words: |
4 / 1054 |
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If the vice president gets involved in the bidding process they may face the peril of "undermining the autonomy" of the division managers. However, by not taking action they will loose the cost saving associated with in-sourcing to Thompson. Central managers will only want to intervene if the negative financial consequences are significant...
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It is stated in the case that, "the volume represented by the transaction in question was less than five percent of the volume of any of the divisions involved," therefore, since it is a relatively small volume the vice president may feel that their involvement is unnecessary. However, as stated "other transactions would conceivably raise similar problems later...
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