Discussion: Business Structures in Practice

Global business organizations sometimes have very complex structures with a large number of subsidiaries, officers, and owners. If something goes wrong, it can be very difficult to sort out the duties and liabilities of these organizations. The multinational bank, BCCI, is an example of how these complicated business structures can make it difficult to monitor criminal activity. BCCI had banks in nearly 70 countries and was staffed by residents of those countries. When BCCI collapsed, the complex structure meant the principals and agents of the company could evade the laws of the United States, United Kingdom, and any other country that tried to determine what specific parties were responsible.

Using the BCCI case or another example that you have researched, discuss the issues that arise when trying to determine responsibilities and liabilities of the principals and agents of these kinds of large multinational organizations. What are some of the lessons learned from this type of problem? What kinds of proposals have there been to try to avoid these kinds of problems?