Controlling the Subsidiaries in Decentralized MNCs

Focusing on Parent-PMS Use and Subsidiaries’ External Embeddedness

Abstract

This study investigates the influence of parent-PMS on subsidiaries’ decision-making, and the relationship between the use of parent-PMS and subsidiaries’ external embeddedness. In particular, this study analyzes the moderating effects of the subsidiaries’ external embeddedness on the cause-effect relation between parent-PMS use and the influence of parent-PMS on subsidiaries’ decision-making. The analyses using survey data from 199 top-managements in Japanese subsidiaries indicate that subsidiaries’ embeddedness in customers negatively moderates the influence of the interactive use of PMS by headquarters although subsidiaries’ embeddedness in suppliers positively moderates the influence of the interactive use of PMS by headquarters.