Evaluate OSI’s strategy in China. Was too much autonomy given to its subsidiaries there?

What do you
think will be the optimal approach for international companies, such as OSI, to govern and manage its
foreign subsidiaries and plants, such as OSI China and Shanghai Husi? Do you think that current rules put
sufficient emphasis on corporate governance issues within company groups? Explain.

Was too much autonomy given to its subsidiaries there?

OSI Group expanded its market by establishing Husi Foods as a local subsidiary in China. Throughout
more than 16 years, OSI grew accustomed to China’s culture and issues in the industry. It goes together
by employing management personnel with familiarity with the business landscape. Moreover, the
company has built a strong presence by having 10 plants in the local industry.

Counting the years and subsidiaries built by OSI in China, the company has given autonomy to them. OSI
poured large investments for the integrated operation on “absolute raw material control”. OSI
structured the operations in China as a decentralized business model. This functions to ease better
context-specific innovation and decisions. The autonomy was exercised within the boundaries of the
company’s global standards. It was not excessive in any nature.

What do you think will be the optimal approach for international companies, such as OSI, to govern
and manage its foreign subsidiaries and plants, such as OSI China and Shanghai Husi?

Managing foreign subsidiaries is vital and challenging for long-term organizational growth. After the
food safety scandal, OSI Group revamps its management structure. They integrated the Chinese arm
into OSI International China. It was a suitable resolution for OSI China to strengthen its internal
governance. A company should develop sturdy & updated internal processes and policies. Moreover,
following these procedures:
-intensive internal control from its database,
-providing directors training for knowledge gaps,
-regular updates & documentation of intercompany developments, and
-structuring core team to address subsidiary management issues.

Corporate governance is the optimal solution for the company to manage foreign subsidiaries. Parent
companies can review their corporate structure and protect corporate integrity. [ CITATION Rob19 \l
1033 ]

Do you think that current rules put sufficient emphasis on corporate governance issues within
company groups? Explain.