The level of involvement of managers in this process depends on the structure of the subsidiaries and the place of decision-making. The right degree of centralized or decentralized decision-making can be critical to the success of an MNC. One study showed that French and Danish managers do not approach the decision-making process in the same way.
Decisions for Attacking the Competition
Kodak’s Corner
In the process of controlling the creation of the new park, thousands of decisions were made about what to include and what to leave out. Mitsubishi transferred ownership to Rockefeller Center Properties Inc., the publicly traded real estate investment trust that held the mortgage on the center. The control process is obviously crucial for MNCs in the fast-moving personal computer (PC) business.
Types of Control
One of the most common examples is the use of monthly business reports that are sent to the registry office. Indirect control is particularly important in international management because of the high costs associated with direct control methods. Typically, multinational companies will use indirect controls to monitor performance on a monthly basis, while direct controls are used semi-annually or annually.
Approaches to Control
In fact, this approach to direct control sometimes results in a manager who is more responsive to central management than to the needs of the local unit. French managers used a control system closer to that of the Germans than to the British. To try to explain the differences in concepts of control, we must consider that the companies of the U.S.
Financial Performance
Some studies predict that as MNCs increase in size, they are likely to move toward the objective orientation of the US. Similarly, a devaluation of the currency will increase the cost of imported materials and supplies for the subsidiary, and a revaluation will decrease these costs due to the relative changes in the purchasing power of local currency. Because devaluation and revaluation of local currency is beyond the control of the overseas unit, the performance of the results will sometimes be a result of external conditions that do not accurately reflect how well the operation is actually managed, which should be taken into account when a subsidiary's evaluation action.
Quality Performance
This advantage can be achieved by the unit in country A charging higher prices than the usual unit in country B, thus providing the MNC with a higher net profit. Simply put, sometimes differences in tax rates can be used to increase the MNC's overall profits. 29 The so-called final performance (i.e. profit or loss) of subsidiaries can also be affected by the devaluation or revaluation of the local currency.
How the Japanese Do Things Differently
The Japanese pushed quality data down to operational employees in quality circles, while the Americans aggregated quality data into summary reports aimed at middle and senior management. Another important difference is that the Japanese tend to build in early warning systems to know when something is going wrong. Another reason is that the Japanese work closely with their suppliers to increase the quality of the latter.
In fact, research shows that among suppliers that have contracts with both American and Japanese auto plants in the United States, the Japanese plants get higher performance from their suppliers than the Americans. 33 The Japanese are able to achieve this because they work closely with their suppliers and help them develop lean manufacturing capabilities. The Japanese philosophy is: "Anything worth doing in quality is worth exaggerating."
Asked whether their approach to quality had resulted in spending more money than necessary, Japanese managers disagreed. Some evidence suggests that, at least in the short term, an excessive focus on quality can become economically unwise. One approach adopted in the United States was described by Genichi Taguchi, one of the foremost quality control experts.
Figure 11-3 compares the use of the Taguchi method and the traditional method to identify the cause of paint defects on a minivan hood.
Personnel Performance
Still, companies must remember that quality goods and services lead to repeat business in the long run, which translates into profits and growth. In contrast, individuals in the United States typically received credit when things went well and blame when performance was poor. The Americans carried this trend further than the Japanese in the case of rewards, including giving high rewards to someone who was a "lone wolf." 38.
The rapid growth in online retailing presents significant challenges in the areas of decision making and management control. A number of factors help influence whether decision making will be centralized or decentralized, including the size of the company, the amount of capital investment, the relative importance of the overseas unit to the MNC, the volume-per-unit-cost relationship, the level of the product. diversification, the distance between the home office and the subsidiary, and the competence of managers in the host country. Three of the most common performance measures used to monitor subsidiaries are financial, quality, and personnel.
What are two likely differences in the way these two firms operate. MNC doing business in Germany find it easier to introduce TQM concepts in German operations or there would be more receptivity to them back in. Every company uses decision making and control to ensure their success in the world market.
Over the past decade, Danish cleantech exports have grown three times as fast as total exports.
Questions
Another sign of its growing strength in clean technology is the extent to which the country is exporting environmentally friendly products. As the International Energy Agency (IEA) states, the clean technology market has developed enormously in recent years and despite no agreement on the international climate in Copenhagen, global investments will total $26 to $36 trillion by 2030 . the fact that energy and environmental companies will have to rely on a wide range of environmental technologies if they want to meet demand.
Reaching 8.6 billion euros in 2008, exports of these products have made Denmark the EU's leading country in energy technology exports relative to total exports.
In the
International Spotlight
The company believes that it will be able to sell as much of the product line in Europe as in the US. The South American market is said to be half the size of the American market. The company charges premium prices for its porcelain, but still enjoys high demand for its products due to the high regard collectors and investors hold for the Kranden line.
The quality of its statues and plates is highly regarded and the company has won three national and two international awards in the past 18 months for creativity and quality of design and production. The company has six world-renowned artists who create finely crafted porcelain figurines and plates that are widely regarded as collector's items. The company does not produce more than this number to avoid diminishing the value of the line to collectors; however, the company believes that additional statues and plaques could be sold in some areas of the world without affecting the North American price.
In particular, the firm is considering setting up production facilities in Rio de Janeiro, Brazil and Paris, France. The production process requires skilled personnel, but there are people in both Rio de Janeiro and Paris who can do the job. The company intends to send three managers to each of its overseas units to handle setup operations and start the production process.
Once this is done, one person is put in charge and the other two return home.
You Be the International
Over the next four years, they fell steadily, but still remained at a steep 79 percent since 2009, one of the highest in the world. A year later, Microsoft opened a development center in India, its largest outside the United States. In addition, it became the first foreign firm to become a member of the China Software Industry Association.
Combined with the short lifespan of the organic dyes, this leads to screen burn, worse than was common in the days of CRT displays. Sony has not been very successful in developing itself as the brand for the masses of the 21st century. The new factory of Tata Motors (Thailand) has started production of the Xenon pick-up, while the Xenon was launched in Thailand in 2008.
Tata Engineering signs a product agreement with MG Rover of the UK 2003 • Tata Safari Limited Edition launched. The company is also said to be working on hybrid and all-electric versions of the Nano. According to Peter Harbison of the Center for Asia-Pacific Aviation, a consultancy in Sydney, Australia, "the key ingredient is liberalization".3.
Virgin Blue was one of the few carriers that survived this initial battle with the incumbents and managed to establish its position in the market. Future growth in air transport may come from the introduction of new business models represented by low-cost and low-fare carriers. In this regard, budget airlines such as AirAsia were hoping for increased cross-border travel in the wake of the December 2008 ASEAN Open Skies Agreement.
Liberalization tends to be infectious and the germs of change are in the air,” concluded Peter Harbison, executive chairman of the Asia Pacific Aviation Centre.44. With all the new competitors for low-cost air travel in the region, AirAsia had to stay ahead.
