Does the kind of control headquarters have over their foreign subsidiaries make a difference? This study examines both formal and informal control of HQ to determine their impact on subsidiary performance. Informal control is operationalized as vertical integrators between HQ and subsidiaries. Measures of both types of control are identified and their relationships with performance are tested using a sample of US multinationals and their subsidiaries in Malaysia and Singapore. Results, based on personal interviews with subsidiary managers, indicate a negative relationship for formal control but a positive one for informal control.
All Science Journal Classification (ASJC) codes
- Business and International Management