ABSTRACT
Introduction With their various strategie objectives, multinational firms establish production and commercial subsidiaries worldwide. They may look for new market opportunities, follow industrial clients, or search for lower production costs in a host country. In some countries or areas, they pursue these different goals at the same time. The reinforcing tendency to establish more subsidiaries worldwide poses a serious problem for multinational corporations (MNCs) that also need to preserve their global efficiency. Efficiency results from the accumulation of experience, economies of scale, standardization of production and written formalization of the organization. Thus, to ensure global efficiency, multinationals generally must exert strong and centralized control over the activities of their subsidiaries worldwide.
