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Chap. 4 corp. gov. at multilevel

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Mara Ba単ez
Mara Ba単ez

This document discusses multilevel corporate governance in multinational corporations (MNCs). It defines multilevel governance and describes three types of subsidiary board structures: boards of listed subsidiaries, boards required by host country law, and boards established for the parent's strategic reasons. It also summarizes research on how Japanese and Swedish MNCs view the advantages of active subsidiary boards. Finally, it examines how corporate strategies like multi-domestic, global, and transnational strategies affect the design of an MNC's corporate governance system.

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Chapter 4 Corporate Governance at Multilevel: The Parent- Subsidiary Link
Multilevel Corporate Governance in MNCs
Multilevel Corporate Governance in MNCs Defining multilevel corporate governance Subsidiaries with their own board of directors are either independently listed on local stock exchanges or they are not listed on exchanges but do either meet a host countrys legal requirements or a parent firms strategic considerations for establishing such boards. This subsidiary-level board of directors governs the subsidiary as a legal entity although there is considerable variation in local and legal requirements as well as how parent and subsidiary choose to structure the role, responsibility and use of such boards.
Multilevel Corporate Governance in MNCs In the first case (when a subsidiary is listed on a host countrys stock exchange), the corporate governance structure in this subsidiary is not much different from the governance structure in host country corporations traded in local stock exchanges. To exercise its power and monitor the subsidiarys governance and performance, the MNC parent generally has three channels or means often used simultaneously to fulfill the goals:(1) having its own directors on the board; (2) controlling the nomination and appointment of key personnel and (3) implementing codes of conducts, ethical standards, and transparency practices set by the parent.
Multilevel Corporate Governance in MNCs In the second case (when a subsidiary is not listed on a local exchange but has its own board to meet a host countrys legal requirement), subsidiary boards are often established in foreign-local equity joint ventures that are legally registered as independent companies in a host country. In the third case (when a subsidiary board is established to meet a parent firms strategic considerations), subsidiary boards play an important part in an MNCs global coordination, accountability, and governance.
Multilevel Corporate Governance in MNCs Japanese MNCs illustrate some specific roles played by subsidiary boards to meet their parents strategic considerations. Their subsidiary boards are generally designed to; 1. approve budgets and short- term plans of the subsidiary 2. monitor operating performance and corrective measures in the subsidiary 3. participate in drawing up the subsidiarys strategic plans 4. ensure compliance with local legal requirements 5. provide knowledge of local social, economic, and political conditions and 6. appraise and attempt to minimize the subsidiarys political risk.
Multilevel Corporate Governance in MNCs These roles are a combination of environmental sensing, decision-making, advising, and monitoring roles. Kriger (1988) offers some interesting survey results showing some advantages as perceived by MNC executive. When they are asked what do you see as the advantages or disadvantages of having a subsidiary with an active board? Japanese MNCs replied: 1. An activated board can give more concrete instructions to officers concerning both responsibility and management. 2. A member of a board, who obtains a fair knowledge of the present situation of the company, can perform the function of a sincere advising agent.
Multilevel Corporate Governance in MNCs 3. An activated board can encourage officers to have a greater interest in the corporation and a strong sense of responsibility. Swedish MNCs responded that an active subsidiary board can; 1. Present an independent view on how the subsidiarys business should be conducted with the goal of making the subsidiary both a business success and a good corporate citizen in its host nation. 2. Counsel the subsidiarys management on its relations with personnel, financial institutions, government bodies, and the public.
Multilevel Corporate Governance in MNCs 3. Periodically appraise the performance of the subsidiarys management, primarily through review of its financial reports and statements. 4. Counsel the company regarding local compensation standards Japanese MNCs appeared to have a strong desire to dig deep roots into the host countries in which they operate whereas North American MNCs were less likely to view a particular host country as requiring such deep roots.
Multilevel Corporate Governance in MNCs Understanding multilevel skills First tier governance influences the second tier governance through ownership holding, organizational coordination, corporate support and performance monitoring.
Multilevel Corporate Governance in MNCs Second tier governance in turn channels back to the first tier through advice provision, governance sharing, information reporting and directorate expansion. Parent board is often the utmost or final authority to approve large investments oversea. In corporate governance the shareholders have the last word.
Multilevel Corporate Governance in MNCs To do a good job, local board members must also have the full confidence of top executives. Second, parent board and subsidiary management are linked despite the very weak magnitude and infrequent manner. Third, parent management board and subsidiary board whose ties are stronger than those between parent board and subsidiary level board and management are linked together via joint monitoring.
Multilevel Corporate Governance in MNCs Finally, the relationship between parent management and subsidiary management which is obviously stronger than all other links. To foster corporate governance : strengthen transparency, coordinate interest and implement conduct codes.
Corporate Governance and Subsidiary Roles
Corporate Governance and Subsidiary Roles Subsidiary roles and Governance design Subsidiary roles are categorized in different ways: FIRST, in Jarillo and Martinezs scheme, the two basic dimension underlying strategic choices are the: a. Geographic localization of activities. b. The degree of integration of those activities with the same activities in other subsidiaries of the firm. A subsidiary that performs most activities in other activities chain has two different options: a. Autonomous from headquarters b. Integrated with headquarters
Corporate Governance and Subsidiary Roles Accordingly, corporate governance should cope with three identities: a. Autonomous subsidiary b. Receptive subsidiary c. Active subsidiary Second classification scheme of subsidiary roles is Gupta and Gorindarajans approach that focuses on knowledge/resources flow patterns. Intra-corporate knowledge flow is defined as the transfer of either expertise or external market data of strategic value.
Corporate Governance and Subsidiary Roles Two dimensions involving knowledge flow that is: a. the extent to which the subsidiary receives knowledge inflow from the rest of the corporation b. the extent to which the subsidiary receives knowledge outflow from the rest of the corporation. As a result, four generic subsidiary roles can be defined: a. Global innovator role b. Integrated player role c. implementer role d. Local innovator
Corporate Governance and Subsidiary Roles The third scheme is made by Barlett and Ghoshal. There are four categories: a. Strategic leader b. Contributor subsidiaries c. Implementer subsidiaries d. Black hole subsidiaries The Final scheme is Poynter and Whites classification. The underlying factors affecting subsidiarys strategic roles include organization slack, the local environment, the values of key implementers, and organizational relationships affecting both the development and execution of strategy.
Corporate Governance and Subsidiary Roles In light of above factors, a subsidiary can be defined as one of five types: a. Miniature replica b. Marketing satellite c. Rationalized manufacturer d. Strategic independent.
Corporate Governance and Subsidiary Roles Corporate strategies and governance design Multi domestic strategy: A multi domestic strategy is one in which strategic and operating decisions are decentralized to the strategic business unit in each country in order to tailor products to the local market. A multi domestic strategy focuses on competition within each country. Global strategy: A global strategy assumes more standardization of products across country markets. As a result, the competitive strategy is centrally controlled by the home office. The strategic business units operating in each country are assumed to be interdependent.
Corporate Governance and Subsidiary Roles Transnational strategy: A transnational strategy is a corporate strategy that seeks to achieve both global efficiency and local responsiveness. Realizing the diverse goals of the transnational strategy is difficult because one goal requires close global coordination, while the other requires local flexibility. The three global integration strategies have implications on the design of the global corporate governance as well. As the global integrations strategy moves from the global to transnational and then to multi domestic, subsidiary board is becoming more important for an MNCs global corporate governance because required local responsiveness heightens with this shift.
Managerial Governance in Global Business
Managerial Governance in Global Business Managerial governance and corporate governance together comprise total governance or organizational governance. Corporate governance involves governance and control of corporate affairs. And often uses ownership concentration, board composition, board leadership, and executive compensation. While managerial governance emphasizes those internal processes and structures that regulate operational decisions and business activities undertaken by an MNCs various subunits.
Managerial Governance in Global Business - Includes the systems that bring about internal adherence within the corporation to a set of strategic goals designed by top management through using corporate power or authority. - Is a more direct intervention involving output monitoring, bureaucratic monitoring, and cultural monitoring. - Directly impacts corporate transparency, accountability, and ethics, which in turn determine the effectiveness of corporate governance.
Managerial Governance in Global Business - Nurtures corporate governance by providing an improved organizational platform to perform internal control, information disclosure and financial or non- financial auditing and to bolster corporate integrity and ethical practices. - Is more relevant in the global setting. - Is manifested in control, coordination, and orientation.
Managerial Governance in Global Business Control is seen as the process which brings about adherence to a goal through the exercise of power or authority. Coordination is seen as more of an enabling process which provides the appropriate linkage between different task units within the organization. Coordination is associated with integrating activities dispersed across subsidiaries. Control is a more direct intervention into the operations of subsidiaries. Coordination is distinguished not by direct intervention but by situating the subsidiary in a network of responsibilities. Compared to control, coordination is less direct, less costly, and has a longer time span.
Managerial Governance in Global Business MNC parents are often unable to use centralized decision-making process to maintain global managerial governance and control for several reasons. 1. The diversity of countries in which the firm operates, the differences in the extent of integration across functions, and the firms evolving product diversification. 2. Maintain the proper global integration-local responsiveness (I-R) balance is an ongoing process which requires occasional reassessment. 3. There may be no single vantage point within the firm from which to consider all of its needs.
Managerial Governance in Global Business Coordinations contribution to global managerial governance has two dimensions: 1. Breadth of coordination - refers to the number of other units with which a subsidiary coordinates. 2. Diversity of coordination the number of functions coordinated. The process of coordination requires mechanisms which can be divided roughly into two groups: 1. Formal Group contains four mechanisms comprising centralization, formalization, planning, and behavioral control 2. Subtle Group includes three kinds of managerial mechanisms, namely lateral relations, informal communication, and organizational culture.
Managerial Governance in Global Business MNCs are increasingly using strategic orientation in lieu of conventional controls to monitor the operation of foreign subsidiaries and to perform managerial governance. Strategic orientation is an efficient mid-range instrument linking global integration with local responsiveness. Compared to control and coordination, strategic orientation arrangement is the least direct, least costly, and has the longest or most sustained effect.
Managerial Governance in Global Business Managerial Control is further composed of output control, bureaucratic control, and cultural control. Output controls require very little managerial direction and intervention, and hence they are likely to result in attempts to influence how individual activities are performed. Bureaucratic control is extensively employed by MNCs. It consists of a limited and explicit set of codified rules and regulations which delineate desired performance in terms of output and/or behavior. A number of organizational practices facilitate the existence of a cultural control system. The use of a cultural control system has several implications for selection, training, and monitoring of organizational members.
Managerial Governance in Global Business Tools of Managerial Governance 1. Information Systems 損 Data Management and Information System tools can be used to control the following: 則 the kinds of information gathered systematically by members of the organization; 則 how such information is aggregated, analyzed, and given a meaning; 則 how, in which form, and to whom it circulates; 則 how it is used in major decision 損 Management tools ensure that relevant differentiated information will be brought to bear on decisions.
Managerial Governance in Global Business 2. Managerial Mechanisms 損 Planning processes can catalyze the strategic convergence and consensus building among executives whose initial perceptions and priorities may differ widely. 損 Conflict Resolution- provides the necessary channels for confronting perceived needs for integration and responsiveness.
Managerial Governance in Global Business 3. Human Resource Administration 損 Market tools include more typical human resource management components such as shaping careers, reward and punishment systems and management development.
Managerial Governance in Global Business 4. Communication Systems 損 Frequency, informality, openness and density of communications between a focal subsidiary and the rest of the corporation should be higher for those subunits which play a greater pat in global integration. 損 Informal Interactions- process through which subsidiary managers values and norms become aligned with those of the parent corporation.
Managerial Governance in Global Business 5. Expatriate Dispatching 損 The ratio of expatriates as a percentage of the top management team should be higher for those subsidiaries which play a bigger role in the MNCs global integration.
Managerial Governance in Global Business 6. Entry Mode selection 損 A fundamental investment strategy which affects the MNCs ability to control local operations and integrate these businesses into global network during subsequent operational stages.
Managerial Governance in Global Business 7. Global Business Structures 損 Global Product Group Structure a product group headquarters is created coordinate the activities of the domestic and foreign divisions within the product group. 損 The main failing of the global product group structure is that while it allows a company to achieve superior efficiency and quality, it is weak when it comes to customer responsiveness.
Managerial Governance in Global Business 8. Corporate Culture 損 Statements, visions, customs, slogans, values, role models, and social rituals that are unique to, and used by, a focal organization to resist corruption practices. 損 Anti-corruption statement 損 Vision and commitments from leadership play a significant role in enhancing managerial governance for global operations.
Managerial Governance in Global Business 9. Ethics Program 損 This control makes information and expectations about legal and ethical behaviors clear, increases the likelihood of detection, assures the punishments of transgressions, rewards desired behaviors and disciplines who engage in illegal behavior. 損 Motivating employees to behave legally and ethically can be prompted by the incorporation of ethics into selection, performance appraisal, discipline and job analysis procedures.

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Chap. 4 corp. gov. at multilevel

  • 1. Chapter 4 Corporate Governance at Multilevel: The Parent- Subsidiary Link
  • 3. Multilevel Corporate Governance in MNCs Defining multilevel corporate governance Subsidiaries with their own board of directors are either independently listed on local stock exchanges or they are not listed on exchanges but do either meet a host countrys legal requirements or a parent firms strategic considerations for establishing such boards. This subsidiary-level board of directors governs the subsidiary as a legal entity although there is considerable variation in local and legal requirements as well as how parent and subsidiary choose to structure the role, responsibility and use of such boards.
  • 4. Multilevel Corporate Governance in MNCs In the first case (when a subsidiary is listed on a host countrys stock exchange), the corporate governance structure in this subsidiary is not much different from the governance structure in host country corporations traded in local stock exchanges. To exercise its power and monitor the subsidiarys governance and performance, the MNC parent generally has three channels or means often used simultaneously to fulfill the goals:(1) having its own directors on the board; (2) controlling the nomination and appointment of key personnel and (3) implementing codes of conducts, ethical standards, and transparency practices set by the parent.
  • 5. Multilevel Corporate Governance in MNCs In the second case (when a subsidiary is not listed on a local exchange but has its own board to meet a host countrys legal requirement), subsidiary boards are often established in foreign-local equity joint ventures that are legally registered as independent companies in a host country. In the third case (when a subsidiary board is established to meet a parent firms strategic considerations), subsidiary boards play an important part in an MNCs global coordination, accountability, and governance.
  • 6. Multilevel Corporate Governance in MNCs Japanese MNCs illustrate some specific roles played by subsidiary boards to meet their parents strategic considerations. Their subsidiary boards are generally designed to; 1. approve budgets and short- term plans of the subsidiary 2. monitor operating performance and corrective measures in the subsidiary 3. participate in drawing up the subsidiarys strategic plans 4. ensure compliance with local legal requirements 5. provide knowledge of local social, economic, and political conditions and 6. appraise and attempt to minimize the subsidiarys political risk.
  • 7. Multilevel Corporate Governance in MNCs These roles are a combination of environmental sensing, decision-making, advising, and monitoring roles. Kriger (1988) offers some interesting survey results showing some advantages as perceived by MNC executive. When they are asked what do you see as the advantages or disadvantages of having a subsidiary with an active board? Japanese MNCs replied: 1. An activated board can give more concrete instructions to officers concerning both responsibility and management. 2. A member of a board, who obtains a fair knowledge of the present situation of the company, can perform the function of a sincere advising agent.
  • 8. Multilevel Corporate Governance in MNCs 3. An activated board can encourage officers to have a greater interest in the corporation and a strong sense of responsibility. Swedish MNCs responded that an active subsidiary board can; 1. Present an independent view on how the subsidiarys business should be conducted with the goal of making the subsidiary both a business success and a good corporate citizen in its host nation. 2. Counsel the subsidiarys management on its relations with personnel, financial institutions, government bodies, and the public.
  • 9. Multilevel Corporate Governance in MNCs 3. Periodically appraise the performance of the subsidiarys management, primarily through review of its financial reports and statements. 4. Counsel the company regarding local compensation standards Japanese MNCs appeared to have a strong desire to dig deep roots into the host countries in which they operate whereas North American MNCs were less likely to view a particular host country as requiring such deep roots.
  • 10. Multilevel Corporate Governance in MNCs Understanding multilevel skills First tier governance influences the second tier governance through ownership holding, organizational coordination, corporate support and performance monitoring.
  • 11. Multilevel Corporate Governance in MNCs Second tier governance in turn channels back to the first tier through advice provision, governance sharing, information reporting and directorate expansion. Parent board is often the utmost or final authority to approve large investments oversea. In corporate governance the shareholders have the last word.
  • 12. Multilevel Corporate Governance in MNCs To do a good job, local board members must also have the full confidence of top executives. Second, parent board and subsidiary management are linked despite the very weak magnitude and infrequent manner. Third, parent management board and subsidiary board whose ties are stronger than those between parent board and subsidiary level board and management are linked together via joint monitoring.
  • 13. Multilevel Corporate Governance in MNCs Finally, the relationship between parent management and subsidiary management which is obviously stronger than all other links. To foster corporate governance : strengthen transparency, coordinate interest and implement conduct codes.
  • 15. Corporate Governance and Subsidiary Roles Subsidiary roles and Governance design Subsidiary roles are categorized in different ways: FIRST, in Jarillo and Martinezs scheme, the two basic dimension underlying strategic choices are the: a. Geographic localization of activities. b. The degree of integration of those activities with the same activities in other subsidiaries of the firm. A subsidiary that performs most activities in other activities chain has two different options: a. Autonomous from headquarters b. Integrated with headquarters
  • 16. Corporate Governance and Subsidiary Roles Accordingly, corporate governance should cope with three identities: a. Autonomous subsidiary b. Receptive subsidiary c. Active subsidiary Second classification scheme of subsidiary roles is Gupta and Gorindarajans approach that focuses on knowledge/resources flow patterns. Intra-corporate knowledge flow is defined as the transfer of either expertise or external market data of strategic value.
  • 17. Corporate Governance and Subsidiary Roles Two dimensions involving knowledge flow that is: a. the extent to which the subsidiary receives knowledge inflow from the rest of the corporation b. the extent to which the subsidiary receives knowledge outflow from the rest of the corporation. As a result, four generic subsidiary roles can be defined: a. Global innovator role b. Integrated player role c. implementer role d. Local innovator
  • 18. Corporate Governance and Subsidiary Roles The third scheme is made by Barlett and Ghoshal. There are four categories: a. Strategic leader b. Contributor subsidiaries c. Implementer subsidiaries d. Black hole subsidiaries The Final scheme is Poynter and Whites classification. The underlying factors affecting subsidiarys strategic roles include organization slack, the local environment, the values of key implementers, and organizational relationships affecting both the development and execution of strategy.
  • 19. Corporate Governance and Subsidiary Roles In light of above factors, a subsidiary can be defined as one of five types: a. Miniature replica b. Marketing satellite c. Rationalized manufacturer d. Strategic independent.
  • 20. Corporate Governance and Subsidiary Roles Corporate strategies and governance design Multi domestic strategy: A multi domestic strategy is one in which strategic and operating decisions are decentralized to the strategic business unit in each country in order to tailor products to the local market. A multi domestic strategy focuses on competition within each country. Global strategy: A global strategy assumes more standardization of products across country markets. As a result, the competitive strategy is centrally controlled by the home office. The strategic business units operating in each country are assumed to be interdependent.
  • 21. Corporate Governance and Subsidiary Roles Transnational strategy: A transnational strategy is a corporate strategy that seeks to achieve both global efficiency and local responsiveness. Realizing the diverse goals of the transnational strategy is difficult because one goal requires close global coordination, while the other requires local flexibility. The three global integration strategies have implications on the design of the global corporate governance as well. As the global integrations strategy moves from the global to transnational and then to multi domestic, subsidiary board is becoming more important for an MNCs global corporate governance because required local responsiveness heightens with this shift.
  • 23. Managerial Governance in Global Business Managerial governance and corporate governance together comprise total governance or organizational governance. Corporate governance involves governance and control of corporate affairs. And often uses ownership concentration, board composition, board leadership, and executive compensation. While managerial governance emphasizes those internal processes and structures that regulate operational decisions and business activities undertaken by an MNCs various subunits.
  • 24. Managerial Governance in Global Business - Includes the systems that bring about internal adherence within the corporation to a set of strategic goals designed by top management through using corporate power or authority. - Is a more direct intervention involving output monitoring, bureaucratic monitoring, and cultural monitoring. - Directly impacts corporate transparency, accountability, and ethics, which in turn determine the effectiveness of corporate governance.
  • 25. Managerial Governance in Global Business - Nurtures corporate governance by providing an improved organizational platform to perform internal control, information disclosure and financial or non- financial auditing and to bolster corporate integrity and ethical practices. - Is more relevant in the global setting. - Is manifested in control, coordination, and orientation.
  • 26. Managerial Governance in Global Business Control is seen as the process which brings about adherence to a goal through the exercise of power or authority. Coordination is seen as more of an enabling process which provides the appropriate linkage between different task units within the organization. Coordination is associated with integrating activities dispersed across subsidiaries. Control is a more direct intervention into the operations of subsidiaries. Coordination is distinguished not by direct intervention but by situating the subsidiary in a network of responsibilities. Compared to control, coordination is less direct, less costly, and has a longer time span.
  • 27. Managerial Governance in Global Business MNC parents are often unable to use centralized decision-making process to maintain global managerial governance and control for several reasons. 1. The diversity of countries in which the firm operates, the differences in the extent of integration across functions, and the firms evolving product diversification. 2. Maintain the proper global integration-local responsiveness (I-R) balance is an ongoing process which requires occasional reassessment. 3. There may be no single vantage point within the firm from which to consider all of its needs.
  • 28. Managerial Governance in Global Business Coordinations contribution to global managerial governance has two dimensions: 1. Breadth of coordination - refers to the number of other units with which a subsidiary coordinates. 2. Diversity of coordination the number of functions coordinated. The process of coordination requires mechanisms which can be divided roughly into two groups: 1. Formal Group contains four mechanisms comprising centralization, formalization, planning, and behavioral control 2. Subtle Group includes three kinds of managerial mechanisms, namely lateral relations, informal communication, and organizational culture.
  • 29. Managerial Governance in Global Business MNCs are increasingly using strategic orientation in lieu of conventional controls to monitor the operation of foreign subsidiaries and to perform managerial governance. Strategic orientation is an efficient mid-range instrument linking global integration with local responsiveness. Compared to control and coordination, strategic orientation arrangement is the least direct, least costly, and has the longest or most sustained effect.
  • 30. Managerial Governance in Global Business Managerial Control is further composed of output control, bureaucratic control, and cultural control. Output controls require very little managerial direction and intervention, and hence they are likely to result in attempts to influence how individual activities are performed. Bureaucratic control is extensively employed by MNCs. It consists of a limited and explicit set of codified rules and regulations which delineate desired performance in terms of output and/or behavior. A number of organizational practices facilitate the existence of a cultural control system. The use of a cultural control system has several implications for selection, training, and monitoring of organizational members.
  • 31. Managerial Governance in Global Business Tools of Managerial Governance 1. Information Systems 損 Data Management and Information System tools can be used to control the following: 則 the kinds of information gathered systematically by members of the organization; 則 how such information is aggregated, analyzed, and given a meaning; 則 how, in which form, and to whom it circulates; 則 how it is used in major decision 損 Management tools ensure that relevant differentiated information will be brought to bear on decisions.
  • 32. Managerial Governance in Global Business 2. Managerial Mechanisms 損 Planning processes can catalyze the strategic convergence and consensus building among executives whose initial perceptions and priorities may differ widely. 損 Conflict Resolution- provides the necessary channels for confronting perceived needs for integration and responsiveness.
  • 33. Managerial Governance in Global Business 3. Human Resource Administration 損 Market tools include more typical human resource management components such as shaping careers, reward and punishment systems and management development.
  • 34. Managerial Governance in Global Business 4. Communication Systems 損 Frequency, informality, openness and density of communications between a focal subsidiary and the rest of the corporation should be higher for those subunits which play a greater pat in global integration. 損 Informal Interactions- process through which subsidiary managers values and norms become aligned with those of the parent corporation.
  • 35. Managerial Governance in Global Business 5. Expatriate Dispatching 損 The ratio of expatriates as a percentage of the top management team should be higher for those subsidiaries which play a bigger role in the MNCs global integration.
  • 36. Managerial Governance in Global Business 6. Entry Mode selection 損 A fundamental investment strategy which affects the MNCs ability to control local operations and integrate these businesses into global network during subsequent operational stages.
  • 37. Managerial Governance in Global Business 7. Global Business Structures 損 Global Product Group Structure a product group headquarters is created coordinate the activities of the domestic and foreign divisions within the product group. 損 The main failing of the global product group structure is that while it allows a company to achieve superior efficiency and quality, it is weak when it comes to customer responsiveness.
  • 38. Managerial Governance in Global Business 8. Corporate Culture 損 Statements, visions, customs, slogans, values, role models, and social rituals that are unique to, and used by, a focal organization to resist corruption practices. 損 Anti-corruption statement 損 Vision and commitments from leadership play a significant role in enhancing managerial governance for global operations.
  • 39. Managerial Governance in Global Business 9. Ethics Program 損 This control makes information and expectations about legal and ethical behaviors clear, increases the likelihood of detection, assures the punishments of transgressions, rewards desired behaviors and disciplines who engage in illegal behavior. 損 Motivating employees to behave legally and ethically can be prompted by the incorporation of ethics into selection, performance appraisal, discipline and job analysis procedures.