Question

Please review the CLOSING CASE: "A Subsidiary Initiative at Bayer Material Science North America" available on page # 321 & 322 and answer the following question.

ON ETHICS: While this is a successful case of subsidiary initiative, from a corporate or division headquarters’ standpoint, it is often difficult to ascertain whether the subsidiary is making good-faith efforts acting in the best interest of the MNE or the subsidiary managers such as Babe are primarily promoting their own self-interest, such as protecting their own jobs. How can headquarters differentiate good-faith efforts from more opportunistic maneuvers?

Answer 1

Headquarters differentiate good-faith efforts from more opportunistic maneuvers by,

- giving CEO preparing with the goal that they would most likely increase a specific control level.

- Evaluating each proposition made

- using the lattice structure, 2 head of division would assess the proposition in this manner making it progressively unmistakable