Summary Chapter 11 Management Decision and Control - Comprehensive Chapter

Chapter 11: Management Decision and Control Learning Objectives and Chapter Summary 1. PROVIDE comparative examples of decision-making in different countries. Decision-making involves choosing from among alternatives. Some countries tend to use more centralized decision-making than others, so that more decisions are made at the top of the MNC than are delegated to the subsidiaries and operating levels. 2. PRESENT some of the major factors affecting the degree of decision-making authority given to overseas units. A number of factors help to influence whether decision-making will be centralized or decentralized, including company size, amount of capital investment, relative importance of the overseas unit to the MNC, volume-to-unit-cost relationship, level of product diversification, distance between the home office and the subsidiary, and the competence of managers in the host country. 3. COMPARE and CONTRAST direct controls with indirect controls. There are a number of decision-making issues with which MNCs currently are being confronted. Some of the most important include total quality management (TQM) decisions and strategies for attacking the competition. 4. DESCRIBE some of the major differences in the ways that MNCs control operations. Controlling involves evaluating results in relation to plans or objectives, then taking action to correct deviations. MNCs control their overseas operations in a number of ways. Most combine direct and indirect controls. Some prefer heavily quantifiable methods, and others opt for more qualitative approaches. Some prefer decentralized approaches; others opt for greater centralization. 5. DISCUSS some of the specific performance measures that are used to control international operations. Three of the most common performance measures used to control subsidiaries are in the financial, quality, and personnel areas. Financial performance typically is measured by profit and return on investment. Quality performance often is controlled through quality circles. Personnel performance typically is judged through performance evaluation techniques.