Multinational Corporations (MNCs) increasingly realise the importance of acknowledging their dispersed subunits as individual organisations with the potential to formulate strategies and implement autonomous decision making in order to ensure the MNC‟s competitive viability. As MNCs need to remain responsive to the distinctive host markets‟ needs in order to retain and grow their market share, knowledge of the evolution of its subsidiaries becomes vital. Vodacom‟s new role as a subsidiary of Vodafone since its acquisition by the MNC in 2009, make it an ideal test subject to evaluate the roles of a subsidiary‟s mandates and its evolution in relation to the parent company from a South African perspective. The study summarised in this paper highlights a theoretically-based evaluation of the subsidiary-role frameworks, and presents new knowledge gained from in-depth interviews conducted with key personnel. The investigation suggests Vodacom is becoming an Active Subsidiary, showing high decision-making autonomy, operating and executing its decision making within the Vodafone procedures, policies and strategy. This has a marked effect on all business functions. Further research could focus on the processes of evolution of the subsidiary roles, and the contribution and strategic positioning of Centre of Excellence in the MNCs. / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

The objectives of the thesis are to describe financial derivatives in a theoretical way and the situations in which they can be applied. How multinational corporations can take advantage of them in different kind of activities. Thesis consist of three chapters. In first chapter there are considered opportunities and threats for a domestic company to expand its activities abroad. It includes the consideration of which necessary activities must be taken prior to the expansion and which most important analysis must be carried out. Finally there is presented the way of dealing with a risk of currency fluctuations and the analysis of exposures that a multinational corporation must face. The second chapter includes a theoretical description and pricing of various types of financial derivatives. It is divided into section of options, futures with forward and swaps. All derivatives type is considered as a tool for hedging and speculations. There are also presented possible outcomes of using derivatives in situations when a market is not in equilibrium and arbitrage possibilities exist. In the third chapter a practical case of a multinational corporation is used as an expample of Lufthansa Group. There are investigated the types of exposures for running a business that this multinational faces and which types of derivatives are used to deal with them. It is analyzed the value of financial derivatives in that corporation, the internal policy to use them, the prerequisites to apply them and the effect of financial derivatives on a company's profitability and financial position.

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U.S. multinational corporations are well known for shifting income to low tax foreign subsidiaries to avoid U.S. income tax. Yet little is known about how multinational corporations opportunistically use low tax foreign subsidiaries for financial reporting purpose. Understanding this question has implications for U.S. accounting regulators to set enforcement targets. Using worldwide consolidated financial statements, I examine the role of taxes for multinational corporations to manage earnings in foreign subsidiaries. I find that by managing earnings in low tax foreign countries, multinational corporations can reduce the effective tax rate on pretax accrual earnings by an average of 4.3%. To examine the implication of opportunistic foreign earnings management on investors' equity valuation, I find evidence that investors do not seem to overvalue foreign managed earnings compared to domestic managed earnings, though foreign earnings are on average valued higher than domestic earnings.

Multinational enterprises (MNEs) engage in tax-planning strategies between their related parties that affect their profit and consequently their tax liability. Transfer pricing (TP) legislation addresses these tax planning strategies of MNEs resulting in increased tax revenues. Despite the updated 2006 TP legislation, shifting of profit and taxes is still occurring by MNEs; therefore, the implications of this legislation need to be examined. The purpose of this study was to compare the reporting of profit, before and after change in legislation, as well as to examine the cost of services mediation of the relationship between the status of the legislation and profit reported. The study's theoretical framework was a combination of economic and strategic management theories. This ex-post facto quantitative study addressed two research questions with the first examining the difference in the reporting of operating profit before and after the updated TP legislation. The second assessed how the cost of services mediates the relationship between the status of the TP legislation and the reporting of operating profits. Data collected on a sample of tax returns, representing 32 industry sectors for each of 14 years, from the Internal Revenue Service were used in applying statistical tests for answering these research questions. The results indicated that the updated TP regulations influenced MNEs for reporting greater profit than before the update as well as possibly inconsistent mediation with the proposed mediator of cost of services. These results support having TP legislation since it would increase tax revenues resulting in positive economic and social changes as well as contributing to achieving sustainable development.

Doctor of Philosophy (PhD) / Changing the behaviour of firms to take environmental concerns into account is seen as unlikely without effective regulations. However, corporations are increasingly keen to represent themselves as ‘green’, including those in the world’s largest manufacturing sector: the car industry. Given rising concern for the environment and environmental sustainability since the 1990s this thesis asks: what motivates car firms to actually make environmental commitments? Answering this question has implications for whether these commitments are ‘real’ and if so whether they are occurring in response to material factors (e.g. state regulations and consumer demand) versus normative factors (e.g. social attitudes and internal company strategies). In order to answer it, the thesis applies the insights of the institutional varieties of capitalism approach to the German, United States and Japanese car industries, and specific firms within them, in respect of the environmental issue of climate change from 1990 to 2004. Empirical national data is analysed, as well the environmental reporting of individual firms and interviews with key personnel. The main findings are that what leads the car industry to see environmental issues as central to their business interests hinges on the impact of differing national institutional factors. Specifically, it is a matter of whether firms have a liberal market economy (LME) as their home base, in the case of US firms, or a coordinated market economy (CME) as their home base, in the case of German and Japanese firms. US car firms react more to the material imperatives of consumer demand and state regulations. German and Japanese firms are more mindful of normative factors for their initiatives, such as social attitudes (especially for German firms) and internal company strategies (especially for Japanese firms). They have more of a partnership approach with government. Therefore, car firms have very distinct ‘lenses’ through which they see the environmental performance of the cars they produce. As such, the thesis concludes that the variety of capitalism of nations has implications not just for the type of products that economic actors such as car firms produce, and the competitive advantages they develop, but also the way they address related issues arising as a result of their activities, including environmental issues.

Drawing insights from strategic management and international business literature, the present study develops an integrated model to explain the competitive actions between multinational firms in a global context. Accordingly, two research questions are addressed: What key factors explain the competitive actions of multinational firms? What key factors moderate the competitive tensions experienced by different pairs of multinational firms? Using structured content analysis to identify competitive actions, the empirical findings of the present study suggest that subsidiary control, MNE size, national culture, government regulations and multimarket contact are all likely to exert important impact on a multinational firm's motivation and capability to compete and therefore influence its competitive aggressiveness in foreign markets.

Recently, some authors point to value creation from the structure and behaviours associated with competition and collaboration inside the organisation (Helfat and Eisenhardt, 2004; Birkinshaw and Lingblad, 2005). While both competition and collaboration have been studied extensively between organisations, less attention has been focused on them and their interaction between units inside the organisation, particularly within complex and heterogeneous multinational corporations. The question is how to achieve the coordination and collaboration that is necessary for a multinational organisation to reap the benefits that international expansion has to offer and yet balance the propensity for competition that exists as business units struggle for scarce resources or new opportunities. In order to answer this question, the aim of this review is to first of all know what the factors and mechanisms are that influence competition and collaboration between organisational units within multinational organisations. Methodology: This study has been conducted using a systematic review methodology with the aim of producing a search of extant literature which can be trusted by others as being thorough, transparent, replicable and clear. Both quantitative and qualitative techniques have been used to achieve this. Findings: This review finds that the there is minimal extant literature that addresses competition and collaboration between business units within the multinational corporation and that it also fails to provide a comprehensive understanding of the factors and mechanisms that influence the co-existence of intraorganisational competition and collaboration. They are typically viewed as mutually exclusive or at opposite ends of a continuum. While there has been some recent research attention given to intraorganisational collaboration and competition, each in their own right, there has not been an extensive review of the factors and mechanisms when looking at their coexistence within the multinational corporate environment. By bringing the two literatures into view and investigating the paradoxical nature of the influences on andthe interactions between competition and collaboration, insights into an optimal mix based on the corporations strategy and value creation logic can be gained for both academics and business unit leaders.

This thesis set out to investigate the relationship between political regime type, and FDI inflow. The academic field has seen a fair amount of research in recent years, but this is usually limited to the likes of democracies and autocracies. I argue that many countries are neither of these two, but find themselves in a political unstable gray zone in between, called hybrid regimes. This thesis draws on a comprehensive dataset ranging from 1980-2010, and by way of time-series cross-section analysis; it sets out to explore the attractiveness of hybrid regimes in relation to FDI inflow. The findings indicate that unstable political regimes do attract MNCs, but that they usually are dependent on natural resources. Hybrid regimes receive more FDI inflow than autocracies, but less than democracies. The thesis also find that the region Africa is special in that hybrid regimes are the biggest recipient of FDI inflow, with natural resources being the main factor. The findings support the former literature saying that democratic conditions attracts MNCs, but also question the alleged democratic transition taking place in a growing oil-dependent world.

The aim of the paper is to discuss how the enterprise chooses its optimal location of the affiliate when its exports to the foreign market are subject to a high tariff rate. We want to know whether the enterprise chooses a third country, which is subject to a lower tariff, and sets an affiliate in there. Because the model contains the multinational enterprise, we take the transfer pricing into consideration. Assume that the factory will not be established on the foreign market, we show that the enterprise would like to move the factory to the third country then export to the market. Furthermore, when the headquarter moves to the third country, it will induce the decrease of the tax revenue of the host country. Then, we try to discuss how the governments¡¦ tax policy affects the tax revenue. Assume the enterprise moves its factory to the third country where selects the double taxation. We show that when the government chooses a looser tax policy, then it will have more opportunity to receive more tax revenue.