Describe how an MNE might use reports as a control mechanism

What will be an ideal response?

Headquarters needs timely reports to allocate resources, correct plans, and reward personnel. Their decisions on how to use capital, personnel, and technology are almost continuous, so reports must be frequent, accurate, and up-to-date to assure meeting the MNE's objectives. Headquarters uses reports to evaluate the performance of subsidiary personnel so as to reward and motivate them. Most MNEs use reports for foreign operations that resemble those they use domestically. The reasons for this include the following:
a. If the reports have been effective domestically, management often believes they also will be effective internationally.
b. There are economies from carrying over the same types of reports. The need to establish new types of reporting mechanisms is eliminated, and corporate management is already familiar with the system.
c. Reports with similar formats presumably allow management to better compare one operation with another's.