Developing Controlling and Performance Evaluation of Multinational Companies Operating in Egypt

Abstract

This research aims to develop controlling and performance evaluation of multinational companies operating in Egypt through considering the effect of the environmental factors and problems affecting the performance of these companies. The main problems of measuring and evaluating the real performance of foreign subsidiaries represent (1) the effect of the environmental factors (economic, legal, cultural, social, and political) in the host country on the performance of subsidiary, (2) the problem of biased transfer prices and its effect on the net income of subsidiary, (3) the problem of inflation in the host country and its effect on reality of financial statement information of foreign subsidiary, and (4) the problem of translation of the accounts of foreign subsidiaries from the currency of the host country into the currency of the parent company. Thus, the research was planned as: The second chapter discusses the multinational companies, their definition, characteristics, objectives, and strategies. The third chapter discusses the literature review of performance evaluation in multinational companies. The fourth chapter discusses the environmental factors (economic, legal, cultural, social, and political) affecting the performance of foreign subsidiary in the host country. The fifth chapter discusses the problem of transfer pricing in multinational companies and its effect on the performance evaluation of foreign subsidiaries. The sixth chapter discusses the problem of inflation in the host countries and its effect on the financial statements of foreign subsidiaries. The seventh chapter deals with the problem of translation of the financial statement of foreign subsidiary from the currency of the host country into the currency of parent company. The eighth chapter presents an empirical study which investigates and determines the important environmental factors affecting the performance of multinational companies operating in Egypt.