Resto que e esquisito Flashcards
Q: What’s two frequently mistakes made my management?
o Treat all foreign subsidiaries in a similar way. Important markets and subsidiaries are treated in the same way as unimportant ones, and therefore the opportunities they provide are not optimally exploited
o HEADQUARTERS HIERARCHY SYNDROME: corporate headquarters rule. Subsidiaries with a distinct, specialized resource base are unable to escape from an implementer role, and loose their entrepreneurial motivation
What’s the solution?
o Assess each market according to its strategic importance
o Rate each subsidiary’s resource base in terms of sales and marketing achievements, production capabilities, research and development, or any other strength contributing to competitiveness
Q: What type of subsidiaries are there, when assessing according to the competence of local orgaization and strategic importance of local environment? What are their roles?
Strategic leader: Subsidiary assists parent in developing & implementing strategy
Contributor: Subsidiary operates in a strategically unimportant market, but it possesses a distinctive core competency (capability/resources). Its core competencies can benefit other units
Implementer: Most subsidiaries fall into this category. They are very important as they generate funds
Black hole: Has negligible market share in important markets where success is essential to maintain global position. This is an undesirable position therefore the MNC may want to commit more resources to move out of here. ….
Not all subsidiaries are in important markets, they may play a different role, e.g. efficiency seeking. So do not look just at market importance
o Resources of subsidiaries evolve
o Market importance evolves
Role of subsidiaries evolves!
Why is corporate governance important?
Corporate governance is:
o the set of mechanisms used to manage relationships among stakeholders and to determine and control the strategic direction and performance of organizations.
o concerned with identifying ways to ensure that strategic decisions are made more effectively.
o used in corporations to establish harmony between the firm’s owners and its toplevel managers whose interests may be in conflict.
•Corporate Strategy: preventing overdiversification
- M&As: preventing empire building or M&As for managerial motives
- Ensuring appropriate strategies are developed and implemented and funds are used in way that maximizes shareholder value.
