Head office and branch or subsidiary, Finance Basics

Assignment Help:

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.


Related Discussions:- Head office and branch or subsidiary

Tests of term structure of interest rates theories, Tests of Term Structure...

Tests of Term Structure of Interest Rates Theories Various tests have been conducted mainly in USA and they show that all the three (3) theories have some validity and therefo

Important points - creditors finances, Important Points - Creditors Finance...

Important Points - Creditors Finances When by using creditor's finances a company must consider: 1. That cost of finance is less than the Return that implies the rate shoul

Functions of central depository system or cds, Functions of Central Deposit...

Functions of Central Depository System or CDS 1. Immobilization of securities that is removal of physical movement of securities. 2. Dematerialization that is removal of ph

High potential venture, High Potential Venture An organization begins w...

High Potential Venture An organization begins with the intent of growing quickly to annual sales of at least $30 to 50 million in 5 years. It also has the potential to have a f

Meaning of a sentence, on this sentence: "all have an interest in understan...

on this sentence: "all have an interest in understanding what drives trade" please explain what''s meaning of "what drives trade"?

Return on the annuity, An insurance company offers you and end of year annu...

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

Importance and solution of dividend decisions, Importance and Solution of D...

Importance and Solution of Dividend Decisions Dividends decisions are integral part of a firm's strategic financing decision. It is hence a plan of action adopted by managemen

The new cash flows., Tank Industries Washers decides to pay the following d...

Tank Industries Washers decides to pay the following dividends over the next four years: $2.50, $3.20, $4.75 and $5.20 respectively (starting at time 1). a.    After year 4, the

Explain financial funds and supply , What does it mean to say that individu...

What does it mean to say that individuals as a group are net suppliers of funds for financial institutions? What do you think the consequences might be in financial markets if indi

Solutions - shareholders and management conflict, Solutions - Shareholders ...

Solutions - Shareholders and Management Conflict Conflicts between management and shareholders may be resolved as follows like: 1. Pegging or attaching managerial compens

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd