An Empirical Study Of The Cultural Control Of Parent Companies And Subsidiaries

The system of parent-subsidiary corporation has already become the most important organizational form of corporate groups. In the new economy full of uncertainty, with the constant enlargement of the scale and quantities of corporate groups, subsidiaries are out of control and the attraction power is absent in parent-subsidiary corporations have become one of the focuses of parent-subsidiary corporation management. Many of researchers have found that in the system of parent-subsidiary corporation there is an unformal control system except of the formal control system, which had been called "cultural control"and been recognized as a useful control system to solve the problems above.Cultural control means to manage and control subsidiaries with attractive future and common beliefs of the parent-subsidiary corporation. The goal of it is to make subsidiaries control themselves following the requirement of the parent initiatively, to lower the management costs and to get synergies in parent-subsidiary corporations. It is universally accepted that corporate culture has three levels:the concepts of value, the bureaucratic system and the material identifiable system. According to this, cultural control also has three levels. We have to realize that it is more difficult to change old values of subsidiaries and share new values of parent-subsidiary corporation than the other two. But the truth is that to share values and beliefs between the parent-subsidiary corporation are the key to cultural control. The power of cultural control is difficult to measure with the methematical methods, but can be reflected by accordance of the staff and consistency of the accordance. The accordance means subsidiaries know clearly the requirement of the parent, and the consistency means the extent that subsidiaries are ready to accept the values and the parental culture.This paper has found that cultural control usually is used as an assistant for formal bureaucratic control after reviewed theories of classic organizational control, multinational control and parent-subsidiary corporation control. And the relative researches about cultural control were skin-deep and were difficult to practice. So, this research has employed the questionnaire method, mainly investigated corporate groups...