 In this topic, we are going to talk about one of the constraints on international performance management, which is non comparable data. So you know that in a multinational, there are various different subsidiary units which are working in different parts of the world. And data is coming from different environments. So the performance data, which is coming from these different environments may not be comparable due to a number of reasons. What reasons could those be? It could be non comparable because of different rules and policies. And these rules and policies may pertain to import duties. For example, if in one country, the import duty on raw material is higher and in another country, the import duty is lower, then it means that your cost of production is going to go up. And if for example, if the cost of exporting, the cost of doing business, as you know that this is a criteria which is measured these days, the ease of doing business in one country is higher and ease of doing business is difficult in other country, then it means that the performance data of the two countries that is not comparable because it is difficult to do business in one country. It is easier to do business in another country because of the rules and policies and because of the facilitation which is provided by the governments that affects the performance of the subsidiaries working in various different countries. Then another constraint or point of difference is the taxation laws. So in some countries, taxation is very high. In other countries, the taxation laws are not that stringent. They are not that strict. So for example, in the developing countries, the organizations and the multinationals, they have to pay a huge amount of taxes whereas in the developing countries, the taxation laws, they are not that strict and the taxation percentages, they are not that high. So the profit after tax for the individuals as well as for the subsidiary units, that becomes non-comparable because of the taxation laws. Then another aspect is that of employment laws. So in various different countries, there are strict bans and strict laws that you cannot hire or you cannot lay off or fire people from your organization unless you can show that there is a need for doing that. So in such countries where the employees, they are protected by employment laws, you need to retain those people unless you can surely show that there is a dire need of getting rid of those people and which is something which is very difficult to do. So therefore, because of such employment laws, if the employment laws are lenient in one country and are strict in another, it means that that is going to create non-comparable data. And then finally, there are quality control checks. In some countries, the quality control for individual performance as well as for the business performance, quality control checks, they are very stringent. If they are stringent, then it is not wise or sensible to compare the data of such country with the country where the quality control checks are lenient. So we are going to talk about two examples. One example is from Brazil and another is from Peru. And in Brazil, the author says that sales in Brazil may be skyrocketing. So the situation is that Brazil has a lot of sales in this particular subsidiary. But there are reports that the Brazilian government may impose tough new exchange controls within a year. Thus making it difficult for the multinational to repatriate profits. So because of the initiative of the Brazilian government, although sales, market share, everything is going good. It is skyrocketing. But because of the Brazilian laws, it may be difficult for the multinational to repatriate profits. They can keep on running their own subsidiary but they won't be able to repatriate profits to the parent company. So does this mean that the multinational is performing effectively? Is the subsidiary performing effectively? And are the senior managers of the subsidiary performing effectively? So if they are not able to give back profits to the parent, to the headquarters, does that mean that the multinational is not performing effectively? So these are the questions which are confusing, which can create dilemma, which can create a problem for measuring the performance. So this is a situation. Then another one is that sales in Peru may be booming. But headquarters management was unaware that under the Peruvian law, accounting rules, sales on consignment are counted as firm sales. Sales on consignment are, this is an accounting term. You can go and read about it on Google. I will explain briefly. Sales on consignment is that our product is kept at a third party. But you do not get payment unless the product is actually sold. So sales on consignment is something which has not happened. But in Peruvian accounting laws, when you put something, for example, in the shelves of a retailer, that is considered to be a part of sales. So sales, it means that your profits are going to go high. So that is a discrepancy. So they were not aware, the headquarters were not aware that the accounting rules, they consider sales on consignment as firm sales. So how should the headquarters accounting system handle these sales relative to sales from other subsidiaries which do not consider sales on consignment as firm sales. So over here, if they do not know that the outcomes of this accounting, the profits, sales on consignment are added in one subsidiary and not added in another subsidiary, and Peruvian data will show that sales are going very high. And similarly, in some other country where sales on consignment are not added in the accounting system, then sales will look comparably low. So this means that it's not because the sales are not high or low, it's because the data is not comparable. So these are two examples from which you can infer that the data of performance is non-comparable in various different situations and that creates a constraint and challenge in international performance management.