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
Ask question #MinimQuestion You are the financial accountant of Donald Bhd, a manufacturer and wholesaler of soft drinks. Donald Bhd is in direct competition with Fizz Bhd and Po

From the above case shareholders are very worried that apple is having too much cash,discuss six reasons why shareholders are so worried


An insurance company offers you and end of year annuity of $48,000 per year for the next 20 years. They claim your return on the annuity is 9%. What is the most you would be willin

Consider the following capital market yielding 1% per year and a mutual fund consisting of 60% stocks and 40% bonds. expected return of stocks 9.75% per year and expected return on


A+/A1 It is one of the top ratings that a ratings agency allots to an issuer or insurer. This rating indicates that the security or carrier has steady financial backing and ple


Your boss has worked in banking for many years, and has specialised during his career in lending to large and medium-sized companies. He must attend a meeting in a few days' time t

ksklklsdfmklsnakakngjkalkgblakbgklabgklagkbaskgbljas a kalks las lgaskgbak a lv aslglaksglas la sla