Explain Why,if Businesses Are Interlinked,the Coordination Costs Are a Concern

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The Answer is If businesses are closely interlinked (e.g.related products to the same customers) coordination costs can be high.Even where the businesses are quite independent,the corporation may insist on common accounting and reporting measures,and common financial and personnel policies,which may not be optimal for individual business units,so that extra costs are incurred.Thus,the combined operations of the businesses,together with the activities of the corporate head office,must create extra value to offset these extra coordination costs in order to continue to attract the same customers.

Explain Why,if Businesses Are Interlinked,the Coordination Costs Are a Concern

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Explain Why,if Businesses Are Interlinked,the Coordination Costs Are a Concern

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