National subsidiaries of multinational companies are largely powerless to direct their own destiny, being, instead, dependent on decisions taken by the parent company or the government of the host country.
This paper attempts to uncover the Headquarter-Subsidiary relationship in multinational corporations and argues that subsidiaries of multinational corporations are powerless in terms of decision-making and autonomy and that they are largely influenced by the decisions of the headquarter…
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Multinational companies and their subsidiaries have become an increasingly important part of the global business landscape. How the business is conducted is dependent on the relationship between the headquarters of the MNC and their subsidiaries. Various factors affect this relationship and in turn, determine the ultimate positioning of power in the organization.
Organization structure affects communication patterns and information flows within the MNC. Organization structure facilitates control and improving structural fit with organization strategy serves to bring the goals of the subsidiaries and the MNC on par with each other.
The aim of the paper will be to show that national subsidiaries of multinational corporations are powerless and are totally dependent on their parent company or the host government. The paper starts with some information on MNC-Subsidiary relationship and moves on to discuss the organization structure and the various control mechanisms that are required to ensure that goals of subsidiaries and the headquarters are in parity with the organizational goal. Centralization and decentralization in MNCs, and how it affects the level of control and decision making in organization is discussed. Moreover, the paper discusses the effects of language barrier, geographical distance and human resource management practices on the headquarter-subsidiary relationship and sheds light on the level of autonomy in each situation. The choice of entry as an investment in foreign markets is explained and how the two choices affect the level of control exercised by the headquarters is discussed. The paper ends with a conclusion.
In the last two decades a substantial number of studies have focused on the role of subsidiaries in Multinational corporation (MNC) network. MNC is defined as "a group of geographically dispersed and goal disparate organizations" (Younes, 2003, p.2). The key aspect of the headquarter-subsidiary relationships is the way in which the headquarters ensure that the subsidiaries are working towards common organizational goals. Control mechanisms and centralization/decentralization level are major pointers for the nature of relationship between headquarters and
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The European countries view the multinationals as the source of ‘European integration’. Increasing Mergers and acquisitions, with ongoing joint ventures have increased ‘multinational penetration’ and integrate the productions of the different member states.
According to the paper multinational companies have been confronted with stiff competition for the past few decades. Forces of globalization such a use of e-marketing, linearization of international trade, product integration and marketing research have all posed profound impact on the way companies may improve their business performance.
Multi, in this context, may mean more than one and national may mean countries or nations.There are a number of famous companies which we deal with. These companies are famous around the world rather than just operating in their host countries.
Although Japan and the United Kingdom are culturally very different, Japanese multinationals have invested more in the United Kingdom than in any other nation of Europe. Thus, although Japanese multinationals present well established human resource and management policies and practices with a distinct Japanese flavour, accommodation, compliance with local laws, practical considerations and a need to adapt that which works best locally in the United Kingdom is likely to present something distinctly Japanese for the British in terms of human resource management.
In this context, many firms chose to promote similar policies in regard to their various sectors aiming to reduce relevant risks. In the HRM area such practices are quite common. In fact, it has been proved that a high percentage of organizations prefer to transfer their home-country human resource management policies to their overseas subsidiaries.
This research will begin with the statement that the constellation of economic, political and sociological events in many countries has created a significant impact on the values and attitudes of any workforce. At the most general level, organizational behavior is influenced and affected by the culture in which each person operates.
The author of the paper states that both the companies place high value in their people. A company is its people. This shows the significance which the Korean based company attaches with its people. Similarly, according to, GE’s people are its greatest asset. This highlights the worth of employees in GE.
As the paper discusses HRM functions in ways that meet the requirements of the working personnel. In multinational corporations, though, HRM functions are created to fulfil requirements on a more global scale. A multinational corporation’s HRM policy is created to source for or locate workers in various regions of the world.
ints of the economic depression are not ended yet, organizations are becoming aware of the fact that they will have to take steps to maintain their staff (Kumar, 2014, p. 98). This could be by means of an enhanced stress on developmental programs or by means of investing in
n This paper is an ample discussion on the agency problem faced by both the multi-national as well as domestic companies, especially banks. The discussion will mainly be focused on the agency problems faced by multinational companies and their level of difference from those of the domestic companies.
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