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Decentralization - Chinese Oreos
Posted by: McQ on Saturday, May 03, 2008

After 5 years of flat sales with their Oreo brand in China, you'd think Kraft would either pull it or change it. But the latter choice, in the top-down, corporate climate that previously was Kraft, wasn't possible for the field.

But Chief Executive Irene Rosenfeld is changing that and injecting a bit of the entrepreneurial spirit into the company by allowing the field to react to market conditions as they exist where they are and do something about it.

If you've never had Chinese 'sweets', you'd find they would taste pretty bland to you. The problem with Oreos in China, then, was they were too sweet (not a problem I've ever heard my grandson's complain about concerning any cookies they can get their hands on). Oreos, then, were reformulated to Chinese tastes (although, given some of the feedback in the story, the new Oreo may still be too sweet from some Chinese taste).

The point though is decentralization of decision making is important in organizations if they want to remain viable. If you can't trust your directors and managers to make those sorts of calls, you're doomed to the results of centralized planning where all problems have a single solution. Of course, you not only have to give managers the authority to act, but they have to accept the responsibility for their actions. That has a tendency to keep things from getting out of hand. It also has a tendency to produce intelligent and flexible organizations which can identify and solve problems at the lowest possible level (and, usually, at the lowest cost as well).

And that makes for successful and profitable companies.
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Previous Comments to this Post 

And that makes for successful and profitable companies.
And Countries.
I would argue that the model can and should be used in terms of governmental structure.
Written By: Bithead
Asians do not like things too sweet. If I were to advise the makers of fine chocolates, I’d say cut the sugar by 30-50% for Asian sales.
Written By: Harun
URL: http://
Oh great, now they’re messing up one of the few things I can get over here.
Written By: Joe R.
Not to over-generalize, but isn’t advertising that ties the concurrent eating of Oreos and milk sort of futile in a place where 93% of the population is lactose intolerant (table at Wikipedia)? It seems analogous to advertising scotch drinking while eating monkey brains here in the US...we just don’t do it.
Written By: skh.pcola
URL: http://
Not only is our chocolate too sweet, it is also too salty. The chocolate is much better in Japan and in Germany.
Written By: MarkD
URL: http://

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