Integrating the Global with the Local: Performance Measurement in Multinational Corporations

Abstract

For multinational corporations (MNC) operating as global businesses with global workforces, the challenge of managing diverse operations in diverse markets has never been greater. These MNCs are concerned with the constraints in integrating dispersed units without stifling local subsidiary initiatives while simultaneously facilitating cross-border transfers of resources and information. Both academics and practitioners have been urged to develop better metrics that ease the process of performance management. While rigorous research has been conducted in relation to generic performance measurement systems, little research has been done regarding the implications of measurement paradigms for MNCs. In order to align adequately the worldwide processes, decisions and actions with corporate goals, a cross-functional, cross-process and cross-border approach is needed. By addressing this deficiency, this paper explores the role of performance measurement within the context of managing MNCs, and presents an integrated framework for performance measurement, which is stated from the viewpoint of both the global headquarters and local subsidiaries. This framework incorporates both financial and non-financial measures, and gives the adequate consideration to intangible assets. This paper has practical implications on firms seeking international expansion.

Keywords:

• performance measurement
• multinational corporations
• globalization
• management control

Additional information

Notes on contributors

Kangwu Kenneth Xi

Dr. Xi is an accounting economist of Statistics Canada, with a focus on the national balance sheet and financial flow accounts. He was a finance lecturer at Carleton University and University of Ottawa. He also brought experience with the World Bank and China Ocean Shipping Group Company (COSCO).