Over the last decade, a number of businesses have experimented with giving regional offices greater leeway in making decisions that traditionally had been handed down from headquarters. Local retailers have been given the latitude to devise regional branding that differs substantially from the company’s national image. In the corporate world, two offices within the same firm in the same state might have differing hiring practices, hierarchical structures, and a different set of job benefits. One nationwide high-technology firm went so far as to give each of its regional offices a turn at doing business for three weeks in which all but the most urgent communications with the head office were discouraged.
One case study, involving a company that offers automobile, homeowner, and office insurance at a dozen locations in the Midwest and the South, provides a lesson in the pitfalls and advantages of “added autonomy,” as this approach is sometimes called. At first, regional managers were wary of taking on too much self-governance, despite personal assurances from the company’s president. This hesitancy initially led to less initiative, precisely the opposite of what was intended. Aggravating matters, many of the top people in the national office felt psychologically uneasy loosening the controls, especially when they realized that local offices were communicating more than ever with one another not under the watchful eyes of the head office. However, this region-to-region sharing of concerns and ideas proved to be genuinely beneficial. A discussion between managers at the firm’s Atlanta and Oklahoma City offices led them both to abandon a new policy for drivers with substandard records, a decision that in retrospect saved the company millions of dollars.
Some regional offices went too far or moved too swiftly. When the firm’s Topeka office decided to step up its marketing efforts to home business owners, a manager thought to save time by using promotional material that was based largely on the company’s homeowner’s insurance material. Eventually, the home office’s legal department discovered that certain terms that applied to the homeowner’s insurance should have been removed from the home business material. By the time this discovery was made, the firm was forced to honor the terms that had been offered.
Despite problems with the retention of personnel at both the regional and national levels, the company has decided to continue along with this program. In light of the company’s slowed economic growth, the ability to find individuals who are comfortable with added autonomy may remain the biggest challenge to the program’s proper implementation, for this or any other company that wishes to pursue an “added autonomy” initiative.
1. The passage is primarily concerned with which of the following?
(A) Detailing the impact that a new business practice has had on several companies
(B) Evaluating the unintended consequences of a shift in hiring and promoting practices at one representative business
(C) Illustrating the importance of keeping lines of communication open between different offices within the same company
(D) Providing a chronological outline of the impact of a new business model.
(E) Reporting on a relatively recent phenomenon that has affected a variety of businesses
2. According to the passage, some regional managers of the insurance company who had been given added autonomy _______.
(A) reported to the head office only when a crisis developed
(B) were afraid to overstep the traditional limitations of their decision-making authority
(C) only began to take initiative after receiving personal assurances from the company’s president
(D) depended on other regional managers for guidance and supervision
(E) misinterpreted the intent of the new system.
3. Which of the following is most likely to be a result of a business implementing added autonomy?
(A) The average age of a manager varies considerably among the various regional offices of a nationwide publishing firm.
(B) A software manufacturer goes against the industry standard and intentionally doubles the time it takes to test new products before making them available to customers.
(C) One branch of a clothing store distributes flyers that show a map of the store’s location within the letters of the store’s name, though no other branch displays the store’s name this way.
(D) A media company’s president visits regional offices to meet with managers and offer face-to-face words of encouragement.
(E) The success of a motorcycle manufacturer’s sales team from one of its dealerships is published in the newsletter published by the company’s head office.
4. Which of the following best describes the structure of the passage?
(A) A problem is addressed, and then a solution is discussed through example and analysis.
(B) A phenomenon is described, and then general examples are given, followed by a specific example that is discussed in some depth.
(C) A business theory is outlined, and then several examples are given that show the inherent weakness of this theory.
(D) A specific business model is analyzed, and the reasoning behind the model is gradually revealed.
(E) The strengths of an idea are described and illustrated, followed by a description and illustration of the pitfalls of the idea.
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