Conducting business as the subsidiary: An investigation of globally implemented MCS impact on headquarter-subsidiary relations and their implications on local business opportunities

Abstract: As companies disperse business activities across a global market, control of subunits scattered within a multitude of countries emerges as a particular challenge. This thesis aims to investigate this association from a subsidiary perspective. More precisely, the impact of globally imposed management control systems upon HQ-Subsidiary relations and their implications upon local business opportunities are studied. A single case study was conducted within the local Indian unit of a large multinational firm focused on a specific control process, the risk assessment process. Analysis of a series of nine semi-structured interviews identified that the MCS force a continuous trade-off between local and global views, diversity vs. control. Tensions were handled by the local unit by following directives, signalling competence and at times, by sidestepping the rules. Adverse effects of this behaviour were mitigated by a strong common culture, aligning individuals with the global targets.