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Determinants of Controlling in Foreign Subsidiaries of MNEs: On the Explanatory Potential of the Institutional Perspective

Author

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  • Cezary Kochalski

    (Poznań University of Economics and Business, Poland)

  • Magdalena Łuczak-Trąpczyńska

    (Poznań University of Economics and Business, Poland)

Abstract

Objective: The main aim of this paper is to identify gaps in extant literature on controlling in MNEs, in particular factors affecting related managerial decisions. Secondly, the relevance of the institutional perspective will be examined for its potential to explain the design of controlling in foreign subsidiaries. Research Design & Methods: The dimensions of international controlling are discussed. Further, the institutional approach is examined for its applicability to advance the understanding of the determinants of shaping controlling systems in foreign subsidiaries of MNEs. Findings: Institutional aspects can have a significant impact on the functioning of MNEs in relation to their controlling systems. Informal institutions can influence the formation of the controlling system in the relations between the subsidiaries of the MNE, whereby also institutions within the MNE itself should be taken into account. Implications & Recommendations: Conducting in-depth qualitative research will allow for a set of recommendations that are relevant to managers responsible for an effective implementation of management control systems. Contribution & Value Added: The relevance of the controlling system in parent-subsidiary relationships has not received significant attention in existing studies in the discipline of international controlling.

Suggested Citation

  • Cezary Kochalski & Magdalena Łuczak-Trąpczyńska, 2017. "Determinants of Controlling in Foreign Subsidiaries of MNEs: On the Explanatory Potential of the Institutional Perspective," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 5(3), pages 79-94.
    • Handle: RePEc:krk:eberjl:v:5:y:2017:i:3:p:79-94
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    References listed on IDEAS

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    Cited by:

    1. Igor Gurkov & Michael J. Morley, 2022. "Anticipated Trajectories Of Development In Global Industries And The Evolution Of Corporate Parenting Styles Of Multinational Corporations," HSE Working papers WP BRP 65/MAN/2022, National Research University Higher School of Economics.

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    More about this item

    Keywords

    Multinational enterprises (MNEs); controlling system; headquarters-subsidiary relationship; coordination; firm performance;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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