MNC
MNC
MNC
Set of flashcards Details
| Flashcards | 141 |
|---|---|
| Language | English |
| Category | Micro-Economics |
| Level | University |
| Created / Updated | 08.05.2016 / 08.05.2016 |
| Weblink |
https://card2brain.ch/cards/mnc?max=40&offset=120
|
| Embed |
<iframe src="https://card2brain.ch/box/mnc/embed" width="780" height="150" scrolling="no" frameborder="0"></iframe>
|
Name three dimensions of partner fit
- fundamental fit
- strategic fit
- cultural fit
Partner selection: Fundamental fit, Can partner contribute to the success based on his own company‘s situation?
• variety of facts about the company
• capabilities of the management
• capabilities of the employees (including education, further
education, etc.)
• manufacturing capabilities
• market oriented capabilities
Partner selection: Strategic fit, Are the company situations and the objectives congruent?
• does the partner company cover the adequate business areas/activities?
• are the resources suitable? (“closing gap alliances“ vs. “critical mass alliances“)
• does the partner company deal with similar customer groups?
• is the used information technology compatible?
• is the size of the partner company suitable? (e.g. resources, power relation)
Partner selection: Cultural fit (”soft factors“), Are the company cultures compatible?
• is the corporate culture similar or at least compatible?
• is the “chemistry” right?
• are the company structures similar?
• trust/commitment towards the partnership
Alliance Design: 5 issues which have to be considered
- Objective(s) of the JV
- Geographical spread
- Duration of the JV
- Organisational culture
- Sharing of tasks
Alliance Design: How to structure the relationship?
- Negotiating the legal and contractual parameters of the alliance
- Determining the coordination mechanisms (ex ante): Hierarchy, Management team
- Determining the most important factors of the alliance structure: How Long? What market?
- What legal form should the alliance use?
- How is knowledge shared/protected? Who has the rights?
- Negotiations: common objectives and final structure/configuration have to be agreed on in negotiations
Operation of the Alliance: Which factors have to be considered? (5)
- Ensuring flexibility
- Decision processes
- Formal and informal coordination mechanisms
- Informal coordination mechanisms
- Communication and information management
Why are Alliances might be terminated? (3 Factors)
- due to failure
- due to having reached the defined objectives
- due to having lasted the defined duration
Or:
- each company (re-)focuses on its own business areas
Why is Opportunism at the end of alliances not wise?
- partnering with the same partner might be best option in a future situation
- re-integration of alliance employees in parental companies difficult
- engagement of alliance partners simultaneously in “multi-projects”
- reputation might be permanently damaged by opportunistic behaviour
What is Management Control?
A process designed to ensure that the specific objectives of a company are accomplished.
What are the general tasks for controlling?
- planning & budgeting
- monitoring / evaluating performance
- information supply for management to support decision making
- deciding on / suggesting corrective actions
Controlling Process
- Defining the performance dimensions
- Setting performance targets
- Measuring performance on these dimensions
- Providing rewards (or sanctions)
Problems in Controlling MNCs (5)
- Usually larger number of „control objects“ (divisions, countries, subsidiaries)
- Subsidiary heterogeneity
- Comparability of results
- Gathering external data
- Higher risks
Name 5 cultural or legal differencies in controlling MNCs
- time horizon for planning / evaluation
- optimism vs. realism in planning figures (UAI)
- degree of formalism in planning processes (UAI)
- quantitative measures vs. qualitative measures
- individual or group results (IND)
What is the problem of currency in controlling MNCs?
- to compare results, currencies have to be calculated into one currency
- currency risks might impose costs on certain subsidiaries
Decisions and Information Requirements at different levels in a MNC
Six Issues in Mulit level control
- Level of detail in planning and setting targets
- „compass“ vs. „roadmap“
- Integration of subsidiaries/divisions in the planning process
- top-down
- bottom-up
- top-down-bottom-up
- Degree of standardisation
- „Orientation“ of control (Ethnocentric, Polycentric, Geocentric)
- Object of controlling
- control to coordinate, select, evaluate the performance of a manager and to give the optimal incentives
- Organisational integration of division/subsidiary controller
The budget preparation process
What are the three main control options?
- Strategic
- Tactical
- Operational
What are possible control instruments? (5)
- cost control
- inventory control
- break-even analysis
- contribution margin analysis
- budgets
Decentralisation of the division controller
