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Organizational Structure: Reporting Systems and Subsidiaries

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The MNC might practice a modified structure where the headquarters is the hub and the subsidiaries are the local entities. This allows the functions of finance and management to occur in the headquarters, but resource acquisitions and labor to be a local plan. Administrative systems and IT are created and handled within the basic hub of the headquarters, but these systems are modified for use in the subsidiaries. If a company wants to continue to add international companies, then it should consider creating an international division within the headquarters.

An MNC is a company that has subsidiaries in other countries as opposed to being a network of companies throughout the world. With a more centralized control, the company can create general policies and marketing, that can be modified when needed in the other countries. However, control for monetary issues, management decisions, technology and information management are left in the country of origin or the headquarters. Controlling knowledge and information is a key concern for many companies and making it accessible within the company as needed is a goal. However, the company will want to have flexible policies that can be adjusted to meet local laws, customs, and cultures.

This was very good Can you tell me about the reporting system you would want in the subsidiary?

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The reporting system would depend on the culture of the local entity and the culture of the organization. The reporting should move both horizontally and vertically where the managers of departments are aware of what needs are required for other departments. Often this ...

Solution Summary

The organizational structures for reporting systems and subsidiaries are provided.

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