Divisions Versus Subsidiaries

Centralization and Decentralization
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rafita
Indonesia

Divisions Versus Subsidiaries

I need some clarification of what is the difference between divisions and subsidiaries. Is there any significant distinction? In the decision making process?

  Sergio Leite
Analyst, Brazil
 

Decentralization / Subsidiaries

OK. A division is an internal organization way. We are dealing with a simple division of labor, responsibilities and authority in a single company with just a single stock control.
Yet subsidiaries represent a more complex concept that involves ownership and the sharing of participation in the capital between some companies, where a holding company maintains the control of the capital upon its subsidiaries. Besides, holding companies usually represent the decision-making centers where the deliberative authority are concentrated, policies, guidelines, operational rules, control systems are settled.

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