Performance Management in MNCs: Macs Essay Example

the regular organizations or by creating an international dare of managers, professionals, and workers of very diverse cultural backgrounds (Destroy, 1994).

In the long run, these Macs will have their own cadres of "globalizes" in perspective and their own sophisticated international managers drawn from three national or country categories. In fact, Macs like Gillette, Nestle, Summit's Bank and Sony are already doing their own international cadre of managers now.

Definition of Terms

Performance Measurement. A performance measures are based on data, and tell a story about whether an agency or activity is achieving its objectives and if progress s being made toward attaining policy or organizational goals. Mueller (1994) defined performance measurement as the "periodic review of operations to ensure that the objectives of the enterprise are being accomplished". Therefore, a corporation's performance measurement system is considered as an important part of its financial control system and the NC must have accounting information to measure and/or evaluate its domestic and foreign operations.

Multinational Company (NC). There is no univocal definition of NC generated by scientific methods; therefore, here is no widespread agreement in the literature as a precise definition of the multinational term. There are many trends to define NC. The first trend defines NC based upon the number of host countries. According to this trend, Miller (1979) says that: "the simplest definition of NC is that considers the NC as a business organization operating in more than one country. " Dunning (1971) also defines NC as "an enterprise which owns or controls producing facilities.

Factories, mines, oil refineries, distribution outlets, offices, etc. ) in more than one country. " The second rend defines NC based upon the amount

of foreign investments. Through this trend, the report of Business International decides that "an enterprise becomes NC when it has at least 35% of its total sales and profit from foreign investments. " The third trend the two previous trends, it defines the NC based upon the number of host countries and the amount of foreign investments.

For example, Hood (1979) says that: "a corporation to be an NC it must have 25% or more foreign content', either in assets, employment or income sourcing in a minimum number of countries, usually five or six ".

The fourth trend presents a definition of the NC through an international view of management. So, the study which was done in Harvard Business School by Professor Raymond Vernon defines the NC as: "a parent or dominant enterprise controlling the operations of a network of foreign corporations and furnishing them with common objectives, strategies and resources. After reviewing the previous definitions of NC, it seems that there is no agreement on one definition or concept of NC.

But through all previous definitions I can define the subsidiaries in different countries to achieve certain objectives, by working together wrought a world managerial strategy under the constraints and laws in the home and host countries. " According to this definition of the NC we can conclude the following facts about the NC: - There is a parent company in the home country where the H.Q. Is. - There are branches or subsidiaries in different countries (host countries). The branches or subsidiaries operate not only to achieve special objectives for themselves, but also for general objectives of the NC as a whole. - The parent

company works under the laws of the home country, while the foreign branches or subsidiaries work under the applied laws in the host countries. .

0 Characteristics of Good Performance Measurement System Although performance measures may have other characteristics, these have been established by the Governmental Accounting Standards Board as follows:

• Relevant measures matter to the intended audience, and clearly relate to the activity being measured. Logic models are a way of establishing relevant measures.
• Understandable measures are clear, concise, and easy for a non-specialist to comprehend. This applies to language used in the title and description and to technical aspects of the measure such selection of performance targets.
• Timely measures have information available frequently enough to have value in making decisions.
• Comparable measures have enough data to tell if performance is getting better, worse or staying about the same. They also provide the reader with a frame of reference or context to tell if current performance meets or exceeds expectations.
• Reliable measures have data that is verifiable, free from bias, and an accurate representation of what it is intended to be.
• Cost-effective measures justify the time and effort to collect, record, display, and analyze the data given the measure's value.
• Useful measures help people doing the work understand what is happening with their business process, and how to get better results for customers.

Characteristics of Multinational Companies (Macs)

Although the underlying forces creating Macs are varied and complex, all Macs have several common dimensions and distinguishing features as the following:

Geographical spread: Macs have wide spread networks of affiliates in different countries in the world. For example, Ford Company has affiliates in more than 30 countries,

Shell Company in more than 40 countries, and Coca Cola Company in more Han 150 countries.

Efficiency: The magnitude of the available resources of Macs enables it to distribute these resources wherever they want in different countries in the world. NC can transport investments, money, people, machines, materials, goods, special technical knowledge and cleverness, and other services.

All these are managed from a global and national perspective.

Power: The power attribute of the NC is a result of its size, geographical spread, scope of operations, and efficiency. Today it is normal that the NC records annual sales greater than GNP in some countries where it operates. Consequently, the NC, as a giant among local firms, in general, has the power (at least in the economic sense) to dominate and control the local markets.

Stability: The stability factor of the NC is also clearly a function of its size and power. The relatively huge resources of the NC may enable unprofitable investment, or from other externalities, without threatening its success and continued existence as a whole group.

Flexibility: According to its size and scope, the NC is certainly the most flexible of the economic enterprises. The excellent communication systems enable the widely decentralized operations to rev the local needs, and also permit the centralized direction to assure the goal congruence.

Dynamic: The NC is certainly dynamic. It must grow in order to survive, particularly where advanced technologies are involved. The NC can convert the conflicting forces and apparent problems into opportunities, by means of its integrated planning techniques.

Monopolistic: The Macs are usually monopolistic, and consequently they are the byproducts of developed countries. It is logical that the NC

would elect to establish its affiliates in countries having little or no genealogy and therefore little or no competition.