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Business structure and performance management




                           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
                  Problems            sharing                 establishment of        differences, e.g.
                   planning,          information             common goals            cultural,
               measuring and          difficult if systems    and collection of       language, time,
                  controlling         are not integrated      information more        currency
                 performance                                  difficult
                                    Quality, cost
                                      control and risk      Security of
                                      management              information may
                                      tricky due to           be more of a
                                      different opinions      concern due to
                                                              lack of legal entity
                                    Difficult to instil a
                                      climate of trust






                  Illustrations and further practice


                  Now try TYU question 3 from Chapter 4 of the Study Text









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