DESIGNING A CONTROL-SYSTEM FOR A MULTINATIONAL SUBSIDIARY

This article discusses how the control systems for multinational subsi diary managers are affected by national variables such as political ri sk, financial/monetary policies and relative cultural distance. These environmental factors are reviewed and synthesized into a three-dimens ional model to help a manager diagnose these influences and choose the appropriate control system. This model illustrates how the salience o f input control increases as multinational entities increasingly compe te globally in nations with unstable financial/monetary policies, sign ificant government restrictions and high cultural distance. global exp ansion into countries with one or more of these will require multinati onal entities to pay added attention to how they recruit, train and re ward subsidiary managers. Copyright (C) 1996 Elsevier Science Ltd