The budget and planning process is the major control instrument in headquarters-subsidiary relationships.

Question

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The budget and planning process is a vital control mechanism in managing the relationships between the headquarters and subsidiaries of multinational firms. This process helps to align the goals of different units, enables effective resource allocation, and facilitates coordination and communication between group entities. By setting targets and monitoring progress towards achieving them, the budgeting and planning process helps to prevent conflicts and enhance performance in the organization.

The Budget and Planning Process Is the Major Control Instrument