Nonetheless, before making such a drastic decision, Assisi needs to determine if they can reinvent themselves in such a way that the programming division could be profitable. Could Assisi start selling another type of computer component that needs programming along side of manufacturing the motherboards? Investigating this option would determine if Assisi could purchase another computer part such as a video card, use their current programming division to program it and then resell it at a profit. Another option for Assisi electronics would be to offer programming services to other businesses that are looking to outsource that particular service. Assisi electronics has an already established pool of talented programmers available; they could market that service to other companies. This option would allow the programming division to transform itself in the short-term while still preserving Assisi’s programming abilities if in the future they needed the flexibility of in-house programming services. This flexibility could provide an advantage to Assisi if in the future market conditions change and they need to sell programmed motherboards. …show more content…
When the managers of divisions are evaluated by the profitability of their SBU, there needs to be a fair way to transfer products from one division to another. If one division feels like it is subsidizing the other division, it will be detrimental to the company as a whole. The high performing division will not be motivated because they will feel as if great performance is not recognized because they do not get full credit (market price) for the products they produce. Conversely, the lower producing division, because the other divisions are subsidizing them, will not be forced to look at their workflow. They will not innovate and streamline operations to remain