All subsidiaries of an MNC are linked together by a plethora of common interests and activities: objectives, goals, production processes, managerial philosophies, styles and policies, data banks, patented technologies, name brands and trademarks, and so on. Although they might want to do so, individual managers cannot treat their own subsidiaries as "the" company. Host governments, however, do consider the subsidiaries as their own national units, subject to regulation with respect to taxation, public disclosure, accountability, positive contributions toward national goals, and good corporate citizenship.
Thus, MNC managers must become accustomed to having a sort of split personality. Like the proverbial Janus, looking inward, they are a separate national unit responsible to the host country's laws and regulations; looking outward, they are part of a larger whole, the MNC, whose headquarters imposes certain rules and regulations that must be obeyed by all subsidiaries. It is understandable that conflicts should arise between the home and the host countries and between the MNC and its subsidiaries. No other area is affected more by these multidimensional relationships than finance. The investing, raising, retaining, reinvesting, dispensing, accumulating, and spending of money are influenced not only by the intersubsidiary and intra-MNC relationships but also by the host and home governments' rules and regulations.
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