High Output Management

by Andrew S. Grove

In fact, the centralization-decentralization dichotomy is so pervasive that it has become one of the most important themes in the management of our network. Do we, for instance, want to advertise locally or nationally? Do we want to give the local manager the control over advertising in his community? We don’t know who reads the Daily Blatt, and he probably does. Do we want to give him the right to hire and fire personnel? Should we let him set his wage scale, or do we want to impose one nationally? The latter hardly makes sense, since labor market conditions vary considerably from region to region. But we do want to buy our sophisticated automatic machinery centrally. After all, it has taken us a long time to develop suitable vendors and the capacity to test the incoming machines given our demanding requirements. We now have a sizable group of people doing only that in Chicago, and we hardly want each branch or even each region to duplicate the effort. But I don’t think we should buy all our eggs in Chicago. We want them to be fresh, and we don’t want to truck this delicate commodity all over the country. Neither do we want to have each branch set up its own incoming egg inspection operation. Here some kind of compromise makes sense, such as regional egg purchasing centers, with each only a few hours by truck from all the franchise locations in the region. We do want uniform, high-quality standards everywhere and we will monitor each of the franchises to make sure that th...