Statutory reporting requirements are designed to satisfy the demands of the company's external stakeholders. Operational/tactical management requirements, on the other hand, reflect the informational needs of individuals or departments within the MNC. Unlike the statutory requirements, which apply to all of the corporations operating in a particular country, tactical management requirements vary from company to company and from case to case within the company. In general, the purpose of mandating subsidiary inputs to the corporate INGLOBIS is to facilitate planning, following up of plans, detecting deviations from plans, evaluating these deviations, taking corrective actions, and adjusting plans. But the magnitude and frequency of reporting by the subsidiaries to the parent company can be a hidden battleground in an MNC. Frequent reporting keeps headquarters informed, but it can prevent subsidiary management from making the most efficient use of organizational resources.
Frequently smaller subsidiaries complain of being asked to report on matters that are completely strange to them. One managing director of a subsidiary in a small country confided:
I think I am going crazy. I just finished a monthly report on leasing private aircraft by my executives .... I put all zeroes or NA everywhere ... that's what they told me to do when I called up and told them that over here there is no such thing as private aircraft. Nobody leases airplanes to go and do business or attend a meeting, which is a very common practice in Chicago. You have no idea how much time I spend doing things like that. Our turnover (sales) is barely over $10 million a year and yet we have to report on things that pertain to hundreds of millions of dollars. Every time I do this kind of thing my whole day is shot. I just go home and play with the kids.
As section N of Figure 16.5 shows, there are two types of tactical management requirements. Financial management requirements relate to information used in exposure management, cash management, and project evaluation and funding. Non-financial management requirements cover data pertinent to the designing and updating of the organizational structure, sourcing and production strategy, marketing strategy, and human resource development strategy.
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