Head office and branch or subsidiary, Finance Basics

Head Office and Branch or Subsidiary

MNC has diverse operations set up in dissimilar geographical locations. The HQ acts like the principal and the subsidiary like an agent hence creating an agency relationship. The subsidiary management may pursue its own goals of on the whole corporate goals at the expense. This will lead to conflict and sub-optimization of interest along with headquarters.

This conflict can be resolved in the following methods as:

a) Managers' Frequent transfer

b) Adopt global strategic planning to surly commonality of vision

c) Having a voluntary code of ethical practices to direct the branch managers

An elaborate performance reporting system given 2-way (two way) feedback mechanism. Performance contracts along with managers via commensurate compensation package for the same.

Posted Date: 1/29/2013 1:59:02 AM | Location : United States







Related Discussions:- Head office and branch or subsidiary, Assignment Help, Ask Question on Head office and branch or subsidiary, Get Answer, Expert's Help, Head office and branch or subsidiary Discussions

Write discussion on Head office and branch or subsidiary
Your posts are moderated
Related Questions
Example of NPV Value A company is faced along with the following five (5) investment opportunities as:   Cost NPV P.I = Total P.v

Example of NPV Method Resolution limited intends to purchase a machine worth Shs.1, 500,000 that will have a residue value Shs.200,000 after 5 years helpful life. The saving

Capital Market - Financial Markets These are markets for long term funds along with maturity time of more than one year. As like of financial instruments required here are deb

Earnings Method or Earning Basis Valuation By using the earning valuation method, a company will employ its P/E ratio to value its shares. P/E    =  MV/E MV    =   E x P

After carefully reading all the available information, prepare a two page (double-spaced) essay and answer the following questions: Assume that we have the following data: C=100+0.

For any company that is quoted on the London Stock Market, you are required to write a report to existing shareholders on any TWO of the following issues. Each answer carries equal

Suppose an entrepreneur owns a firm which has two production opportunities. Technology A generates an output (net profit) of 10 in state 1, an output of 20 in state 2, and an outpu

Potential Investors - Measuring Business Performance Potential investors These parties are interested in a company in total both on long and short term basis in particula

Example of Debt Finance An example: Interest = 10% tax rate = 30% The effective cost of debt (interest) = Interest rate (1 - T) = 10%(1-0.30) = 7% Consider comp

Present Value of Uneven Periodic Sum - DCF Technique As in investment decisions it is very rare to acquire even periodic returns and in most cases a company will generate a st