Page 74 - APM Integrated Workbook STUDENT S18-J19

Chapter 4

Performance management problems in

complex business structures

Type Joint venture Strategic alliance Multinationals

A separate business Similar to a joint Have subsidiaries or
entity with shares venture but a operations in a
What is it? owned by two or separate business number of countries.
more business entity is not formed.
entities.

 Agreement of Many of the  Co-ordination
common goals problems of joint towards common
and measures. ventures apply but goals.
more specifically:
 Attributing  Common systems
accountability.  independence may not exist.
retained making
 Reporting and  A host of
sharing establishment of differences, e.g.
Problems information common goals cultural,
planning, and collection of
measuring and difficult if systems information more language, time,
currency.
are not
controlling difficult
performance integrated.  security of
 Quality, cost
control and risk information may
management be more of a
tricky due to concern due to
different opinions. lack of legal
entity.
 Difficult to instil a
climate of trust.

Other examples of complex business structures include franchising, licensing and
complex supply chains.

Illustrations and further practice

Now try TYU question 3 and read illustration 1 from Chapter 4 of the Study
Text.

64