A study on multinational company’s management control and coordination mechanism towards subsidiaries in Malaysia
Sanggetha Gopalan & Narentheren Kaliappen
What the paper says
Purpose This research intends to investigate multinational companies’ type of controls and the control and coordination mechanism towards subsidiaries. Concerning this, this study analyzes knowledge about the impact of bureaucratic control, output control and cultural control on control and coordination mechanism of multinational companies towards foreign subsidiaries, especially in Kulim Industrial Area. Design/methodology/approach This research adopts a quantitative approach and focuses on management staff as respondents. The respondents were chosen through judgmental sampling from foreign subsidiaries in the Kulim Industrial Area, and the data were analysed by SPSS version 27. Findings Multinational companies’ bureaucratic control, output control and cultural control have significant relationships on the control and coordination mechanisms towards subsidiaries in Kulim Industrial Area. However, the findings revealed that compared to output control and culture control, bureaucratic control is the type of control influenced by foreign headquarters on control and coordination mechanisms towards subsidiaries in Kulim Industrial Area. Research limitations/implications The research acknowledges the limitations of focusing on three independent variables: bureaucratic control, output control and cultural control, which represent subsidiaries of foreign headquarters located in the Kulim Industrial Area. Practical implications This research provided both practical and theoretical discernment on the effects of different types of controls on control and coordination mechanisms. The theoretical insights into formal control through socialization create administrative links and provide autonomy in control and coordination mechanisms. Practical implications provided valuable knowledge for organizations and managers, emphasizing the positive and negative effects of different types of controls on the overall control and coordination mechanism. Originality/value This paper highlighted that control and coordination mechanism facilitate the multinational companies to coordinate the foreign subsidiaries in the Kulim Industrial Area with bureaucratic control, output control and cultural control. Therefore, this paper discovered, compared to output control and cultural control, bureaucratic control is the type of control that influences foreign headquarters on control and coordination mechanisms towards subsidiaries in the Kulim Industrial Area. However, in addition to that, this paper detected that in the multinational companies control and coordination mechanism, output control had a higher impact than bureaucratic control and cultural control. Furthermore, the higher impact of output control was demonstrated as a negative impact towards subsidiaries in the Kulim Industrial Area.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.