You Are Employed at the Headquarters of a Large MNE

question 25

Essay

You are employed at the headquarters of a large MNE.While visiting one of the firm's foreign operations,you overhear the following comment,"Top-level corporate management has become an increasingly burdensome cost centre in the modern transnational.Our company employs well-trained and highly skilled individuals as global business managers,worldwide functional managers and geographic (country)managers.To enhance performance,our firm should thin the ranks at the corporate executive level and allow the business,functional and geographic managers more liberty to coordinate their own activities." Upon returning to headquarters,you are advised that you are being promoted to a country manager position within the MNE.However,you have been asked to prepare a report on your observations from your recent trip before you leave to start your new role.Use this report as an opportunity to discuss your position in support of,or against,this perspective regarding top-level management.

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Definitions:

Fixed Cost

refers to a business expense that remains constant regardless of the level of production or sales, such as rent or salaries.

Total Cost

The aggregate of every expense related to the creation of services or goods, taking into account both constant and fluctuating costs.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity produced, indicating the average cost per unit.

Diminishing Marginal Returns

A principle stating that as one adds more of a variable input to a fixed input, after a certain point, the additional output generated begins to decrease.