The purpose of this project is to discuss and analyse the factors that result in different subsidiaries of Transnational Corporations (TNCs) playing out different roles within the organisation. This will be done by testing the completeness of the Bartlett and Ghoshal (1986) typology as it is perhaps the most well-known and prescriptive of all the typologies within this field. It will be shown, using the automobile industry with in-depth analysis of Toyota - the Japanese automobile manufacture - that Bartlett and Ghoshal's typology, although very important in determining the roles that subsidiaries take on, is incomplete. It will be shown that it fails to take other factors into account when prescribing the subsidiary roles within the organization. We therefore advise our client to consider other factors when deciding on the degree of autonomy to grant to its subsidiaries.
Introduction.
For the purpose of this report, the term "subsidiary" will be taken as "any operational unit controlled by the Multinational Corporation [in our case, TNC] and situated outside the home country" (Birkinshaw, 1997). The term "role" is taken to be the discrete activity or activities that the subsidiary engages in. The term TNC will be discussed at length within the main body of the report.
MSM Consulting's client is a leading Japanese global manufacturer of motor vehicles. In the past year the client has been concerned that their internal organisational structure is suboptimal to the decison-making process. The client is unaware of how much autonomy to grant to their subsidiaries to suit the needs of their organisation. They have enlisted MSM Consulting to advise them on how best to determine this degree of autonomy that they should grant to their subsidiaries. MSM Consulting will use a both research of literature and research on a close competitor to advise the client.
In order to analyse this problem, we will investigate the literature on subsidiary roles within organisations, as the role a subsidiary takes on and the amount of autonomy a parent company gives to its subsidiary are one and the same questions.
Such power centres would of course include such institutions as non-governmental organizations (NGOs), inter-governmental organizations (IGOs) and multinational companies (MNCs). ... There is no doubt that the world economy is moving towards a "post-state" era where the role of the autonomous sovereign state is seriously undermined in light of this growing economic interdependence. ...
Many factors contribute to the exchange rate fluctuations for both currencies. One major factor includes unemployment. ... During the translations of the entire business exchange rate on the particular date plays a vital role of translation in the books of the company and would be prone to the exchange risk. ... Consider how the MNC could minimize any negative impacts of such movements. To this end, formulate at least (2) currency-derivative strategies that the MNC can use to foreign exchange risk management. ...
The reason for this is because, several technological develpments since last decades or so facilitated the expansion and integration of intra-industry trade, not only among OECD countries, but aslo between industrialized and developing countires; First, progress in transportation and communication systems has substatially reduced the transaction costs of factor mobility across national boundaries. ... Hence, a well integrated global production network, which was facilitated by mobile capitals from MNCs and financial liberalization undertaken in the NICs, was emerging rapidly. ... Therefore,...
In 2015, the International Monetary Fund reports that in the last two decades, the average GDP growth rate over 5.8% and this fast-growing economic of India has attracted many foreign companies to settle subsidiaries in the country. Based on this background, this report gives a detailed analysis about sourcing of human resources of subsidiaries and international training about subsidiary companies. ... It also analyses international training of subsidiaries in India and suggests the companies provide relevant training programs. 2. ... Its role is an advisor for informal sectors. ...
Nevertheless there are various external and internal factors that have a significant influence in how the company does its every-day business. ... The gains from its subsidiaries in regions experiencing economic prosperity are somewhat offset by the losses experienced by the subsidiaries economically depressed regions. ... With various new projects in planning for its product lines, employee benefits programs, and community sponsorship programs; Honda is putting itself in the best position ever to maintain its dominance in the automotive market. ...
A perfect example of this kind of problem caused by MNCs is the development of the oil industry in the Niger Delta. ... This is another account of environmental issues caused indirectly however, by MNCs. As demonstrated in the case of the Niger delta, MNCs can cause direct environmental problems through inadequate practices; however it is the long term, indirect effects of MNCs that also cause great concern for the future of the environment. ... Some evidence suggests that MNCs generate 50% of the greenhouse gases causing global warming, which isn't surprising when MNCs used to be the m...
The automotive industry has been advancing since its beginning just over a century ago. ... That same year, the patent for the drum brake system was granted to a Louis Renault and was used by the great majority of automotive producers. ... Currently, automotive companies are experimenting with a new set of brakes that increase the contract between the brake pads and the rotor. ... Advancing brake technology is just one way the automotive industry has increased the safety for all in and around vehicles....
This is believed to result in decentralisation of power to provincial governments and automotive industry departments. ... (www.english.peopledaily.com.cn) These market-opening policies are naturally also affecting tariffs and quotas. ...
After World War II, the automotive sector in South Africa expanded even more and quicker. ... In 2013, its follower, the Automotive Production & Development Programme was made. ... Opportunities also lie in the production of materials (automotive steel & components). ... The objective of the automotive industry is to keep production as stable as possible. ... Research is vital for this topic because it enlightens the reader about the importance of factors that influence buyer and seller collaboration in the South African automotive sector. ...
