Performance Evaluation of Foreign Operations

To date, management accountants have had mixed good results in developing comparable economic controls for multinational firms and their foreign operations. Moreover to the numerous contextual variables that complicate the style of international performance evaluation systems is the much more latest challenge of creating dynamic performance measurement and financial controls. The behavioral model that continues to describe extant practices is the fact that organizations establish goals, or aspiration levels, and compare their actual performance to these objectives. Performance relative to aspiration tends to elicit an array of corporate responses associated with achievement, efficiency that exceeds aspirations, and failure, performance that falls short of aspirations. 

The remaining sections of this chapter examine some big troubles linked using the efficiency evaluation of foreign operations, describe how top MNCs evaluate efficiency, and supply some general policy guidelines.