Economic Exposure The subsidiary manager should be held responsible for the dependence effects of exchange rates resulting from economic exposure. It is appropriate for the control system to evaluate the subsidiary manager on decisions that would have enabled the subsidiary to respond to real exchange rate changes. Real exchange rate changes require important strategic and operating decisions. It is good for Xerox to have regular discussions about the currency and proposals for increasing market share or profits.6. Performance Evaluation of Foreign Subsidiaries The performance measures are driven by the Manufacturing Support which is the central support function. The Venray plant is legally owned by Rank Xerox but it is evaluated by MS. In addition, the Venray product array supports more than one business division; therefore, Venray has to report to several other divisions besides MS. We suggest Xerox let the local people familiar with the culture and market manage their local environment and evaluate its business units according to their legal entities. It is easier for Xerox’s local subsidiary managers to see more of a direct link between their decisions and actions, including related evaluative feedback. In addition, this can aid in avoiding distortions of the plant's performance caused by transfer pricing and currency translation.