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

Ask an Expert

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

Write your message here..

Related Questions

Calculate future value, Your grandparents put $1,000 into a saving account ... Your grandparents put $1,000 into a saving account for you when you were born 30 years ago. This account has been earning interest at a compound rate of 7%. What is its value today

Types of partners, Types of Partners 1. General Partners -Unlimited ac... Types of Partners 1. General Partners -Unlimited active and liability in participation in partnership activities. 2. Limited partners - Limited liability in the management of

Traditional business of deposit taking and lending, Question 1: i) Disc... Question 1: i) Discuss  the main risks facing a retail bank in its traditional business of deposit taking and lending? ii) How can a bank manage the risks related to credit

estimate the price of the bond, Stardusts has 1 debt issue outstanding.  T... Stardusts has 1 debt issue outstanding.  The debt matures on August 15, 2017, and has a 6.25% coupon.  Coupons are paid semiannually.  The bond is priced to yield 1.61% compound se

Time value of money problems, if you won the publisher''s clearing house $1... if you won the publisher''s clearing house $10 million prize (payable as 30 pmts of $250,000 and $2.5m in yr. 30) and could invest the money at 8%, would you accept an offer of $3.

Bank draft, what is bank draft?How it can be prepared? what is bank draft?How it can be prepared?

Effective reach and effective frequency-insurance , Before purchasing insur... Before purchasing insurance we have to go through different factors. Among different important factors there are two most crucial aspects we should consider before buying insurance

Jobbers or speculators - stock market, Jobbers or Speculators - Stock Marke... Jobbers or Speculators - Stock Market 1. This is a dealer who that trades in securities in his own right like a principal. 2. He can set prices and make active the market w

Dividend policies and decisions, Dividend Policies and Decisions Divid... Dividend Policies and Decisions Dividend policy determines the division of earnings among payments to stock holder's ad re-investment in the firm.  Hence now it looks at the f

Operating cycle, Discuss the applicability of an operating cycle in the veg... Discuss the applicability of an operating cycle in the vegetable growing business