The Research On The Influence Of Control Modes To Subsidiary Performance In Chinese Multinational Enterpirses

At the turn of the century,Chinese government puted forward the strategy of “goningout”, and the development of Chinese multinational enterprises has been becoming rapid.Nowa lot of enterprises take transnational operation,and the structures of parent and subsidiarycompanies are built.There is a link of captial between parent company and subsidiaries inmultinational enterprises,just like a net.From the point of the law,they are independent of eachother.There is no way for parent company to intervene the operation of subsidiariesdirectly,and there may be a new principal-agent problem produced between them.Themanagers of subsidiary may not run it following the intention of parent company.Therefore,p-arent company should control the operation of subsidiary to ensure the efficiency of the entireenterprise.Then the autonomy of subsidiary manager will be restricted because of control,andit will produce an influence to subsidiary performance.So there is a problem of control tosubsidiary for parent company to consider.This research is based on the theory of organizational structure,management controltheory and the principal-agent theory,sums up literatures on control,induces three dimensionsof control modes which are power distribution, implementation ways and the subject ofcontrol,and analyzes the internal mechanism of control influencing subsidiary performance.Atlast,there is a discussion of the influence about different control modes to subsidiaryperformance.This paper aims to deepen the control theory on parent company and subsidiarie-s,developes the division dimensions of control modes,and analyzes the influence of controlmodes to subsidiary performance in Chinese multinaitonal enterprises.It can guide the operat-ion of Chinese multinational enterprises and make them larger and larger.Through the empirical analysis,it was found that entrusting control mode and informalcontrol mode would lead to a better performance for subsidiary.While lateral control modeand longitudinal control mode have little influence to subsidiary performance.Therefore,forthe operation of overseas subsidiary,parent company should satisfy the reasonable power req-uirements of subsidiary management team so as to improve their loyalty and satisfaction inChinese multinational enterprises.At the same time,parent company can have influence to su-bsidiary managers through informal system and take the action of control through corporateculture,trust, relationship and so on.