The influence of subsidiary context and head office strategic management style on control of MNCs: the experience in Australia

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Abstract:

This study examines the control issues related to three major flows among MNC subsidiaries: knowledge flows, product flows and capital flows. It also investigates the relationship between the strategic management style of headquarters and the control approaches employed. The results show the dominance of output control, even in situations where researchers have argued that they should not be relied upon. The study also found that as knowledge flow increases, reliance on financial control decreases and reliance on socialisation control increases. Consistent with other studies, the dominant management style is the strategic control style, while the least popular is the financial control style. The paper calls for using alternative theoretical lenses, such as institutional theory, to provide additional insights not available through the contingency lens.
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