management service contracts
DESCRIPTION
TRANSCRIPT
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MANAGEMENT SERVICE CONTRACTS
JUAN FELIPE MORA BONILLA1520101018
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¿ What is MSC ?
A management service contract is used to hire a company to run a business.
MSC are agreements used between investors or owners of a project or business and a management company.
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Technical Operation of a
Production
Management of personel
Accounting Marketing Services
Training
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• Can be found in industries like hotel, hospital, and infrastructure entities like airports, seaports, and public utilities.
• Management contracts are often formed where there is a lack of local skills to run a project.
• The first recorded management contract was initiated by Qantas and Mr. Duncan Upton in 1978 to create an airline in Sidney.
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PURPOSE
This agreement is designed to protect both
parties and to allow them to understand
their obligations.
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DETAILS
It explains the payment amount, method and due date and any other important terms of the agreement.
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ADVANTAGES
The owner → Silent partner.
Management Company → Day-to-day
tasks.
More performance = More bonuses
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DISADVANTAGES
What the management
company cannot handle, the owner
have to do it.
What decision have to make?
More expenses
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• DBS Asia (Thailand) agreed a management contract to set up and run a company of digital television programming in Taiwan.
• In Asia, many hotels operate under management contract arrangements, as they can more easily obtain economies of scale, a global reservation systems, brand recognition etc.
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MANAGEMENT SERVICE CONTRACTS
Home Country Host Country
Wholly-Owned Subsidiary
Multinational Firm
Local Firm
Management Fees
Managerial Service
Profit
Inputs
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Thanks a lot!
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SOURCES
• http://www.ehow.com/info_8067580_management-service-contracts.html#ixzz26fgNkmaV
• http://entrymodes2.wikispaces.com/Management+Service+Contracts
• http://en.wikipedia.org/wiki/Management_contract