| Following the group development of listed companies and the increase in the proportion of business undertaken by subsidiaries,the impact of their social responsibility performance on the overall social responsibility performance of listed companies should not be underestimated.By 2020,22% of China’s carbon emission trading pilot enterprises are subsidiaries of listed companies,which play an important role in achieving the "dual carbon" goal.The lack of social responsibility of subsidiaries also affects the overall social responsibility evaluation of listed companies.In 2014,Shandong Lukang Pharmaceutical Co.,Ltd.faced a huge fine for its subsidiary’s excessive emissions,resulting in a loss for the year and damaging the interests of society and shareholders.How to control the socially responsible behavior of subsidiaries to achieve the overall sustainable development goals has become an important topic.There have been studies on CSR that treat listed parents and subsidiaries as consolidated subjects and focus only on the effects of controlling shareholders,governance characteristics,group affiliation and parent company equity concentration.The parent company exercises equity control and decision rights control over the subsidiary,and the parent company will give the subsidiary certain operating autonomy and resource allocation rights for the sake of business development,which is more direct than equity control parent company decision rights control.However,how the overall social responsibility performance of listed parents and subsidiaries as a corporate group composed of independent legal entities is subject to the allocation of decision rights of parents and subsidiaries has not been paid attention to.The studies that have been conducted on the allocation of decision rights have only focused on the impact on economic benefits such as innovation behavior,investment efficiency and financial performance,ignoring the impact on CSR,while the allocation of decision rights of socially responsible subjects has a profound impact on resource acquisition and behavioral supervision of CSR performance deserves attention.Whether the allocation of decision rights between parents and subsidiaries affects the overall social responsibility performance of business groups.Some studies have found that plutocrats with a high centralization of decision rights have better social responsibility performance,and that parent companies control their subsidiaries through the allocation of decision rights to coordinate the increasingly complex contractual relationships between parents and subsidiaries,affecting overall social responsibility performance.The allocation of decision rights within an organization ultimately depends on the trade-off between information transfer costs and agency costs.(1)From the "governance viewpoint",the different interests of the parent and the subsidiary may lead the subsidiary to achieve its own interests at the expense of the group’s interests,which increases the agency costs between the parent and the subsidiary,and the decision rights allocation of the parent company can influence the space for the management of the subsidiary to manipulate power,which in turn affects the overall social responsibility performance.(2)From the "resource perspective",excessive autonomy of subsidiaries may lead to resource mismatch,and centralized decision rights of the parent company can coordinate resource allocation from a global perspective and provide resources for participation and disclosure of social responsibility activities.(3)From the "reputation viewpoint",social responsibility performance is regarded as a reputation management tool,and the parent company’s control of decision rights can use information disclosure to cushion the group’s reputation loss and play a role in value protection.Organizational size and business complexity are the main factors affecting the effectiveness of governance in the allocation of decision rights.The proliferation of subsidiaries may increase information asymmetries within the group,increase opportunities for rent-seeking by subsidiary management,and increase the complexity for the parent company to coordinate the actions of its subsidiaries.A large body of past research on the "diversification discount" provides evidence that a large number of divisions or subsidiaries can reduce corporate cash holdings and enterprise value.Given the role of centralized decision making in mitigating agency problems and enhancing control,centralization may be more advantageous in socially responsible decision making in complex organizations.Financial resources are the basis for social responsibility activities,production and operation compliance affects social responsibility evaluation,and personnel monitoring and compensation incentives can ensure the achievement of the group’s social responsibility goals.Therefore,in order to address the core issue of how decision rights allocation of parents and subsidiaries affects the overall social responsibility performance of business groups,this paper explores the following four specific questions: First,how does the allocation of financial decision rights of parents and subsidiaries affect the overall social responsibility performance of business groups? Secondly,how does the allocation of operational decision rights of parents and subsidiaries affect the overall social responsibility performance of the enterprise group? Third,how does the allocation of personnel decision rights of parents and subsidiaries affect the overall social responsibility performance of enterprise groups? Fourth,what is the heterogeneous impact on the number of subsidiaries on the role of decision rights allocation?The core findings of this paper are threefold:(1)The study on the allocation of financial decision rights finds that the concentration of financial decision rights in the parent company is conducive to enhancing the social responsibility performance of the enterprise group,and the positive effect on social responsibility disclosure is greater when the number of subsidiaries is larger,but the positive effect of the concentration of financial rights on social responsibility inputs is not affected by the number of subsidiaries.The mechanism test indicates that the centralization of financial decision rights obtains the resource base for social responsibility performance by reducing the sensitivity of social responsibility inputs to external financing cash flows and alleviating financing constraints,and safeguards the consistency of parent-subsidiary objectives by reducing management rent-seeking,thus enhancing overall social responsibility performance.(2)The study on the allocation of operating decision rights found that the concentration of operating decision rights in the parent company is conducive to enhancing the CSR performance of the business group,with a greater positive impact on social responsibility disclosure when there are fewer subsidiaries and a greater positive impact on CSR inputs when there are more subsidiaries.The mechanism test indicates that the concentration of operating decision rights obtains financial support for social responsibility activities by increasing the cash flow from the company’s operating activities,and prevents the subsidiaries’ behavior from deviating from the group’s social responsibility goals by reducing the rent-seeking of the subsidiaries’ management,thus improving the overall CSR performance.(3)A study on the allocation of personnel decision rights found that the concentration of personnel decision rights in the parent company is conducive to improving the CSR performance of the business group,and the positive impact of the allocation of personnel decision rights on CSR disclosure and social responsibility investment is greater when there are more subsidiaries.The centralization of personnel decision rights restrains the behavior of subsidiaries by reducing rent-seeking of subsidiary management,maintains the overall reputation to promote subsidiaries’ compliance with the overall social responsibility strategy,and provides a resource base for social responsibility activities by improving the efficiency of resource management,thus promoting the overall CSR performance.The innovation and academic contributions of this study are mainly reflected in four aspects:(1)The theoretical analysis framework of multi-decisional power allocation in social responsibility strategic decision making is constructed to provide new ideas for comprehensive analysis of corporate decision making power allocation.Compared with the abstract allocation of power in previous theoretical studies,this paper illustrates the logical relationship between the allocation of financial,operational and personnel decision rights in CSR strategic decision-making,as well as the differentiated role mechanisms,and constructs a "unified three-coordinated" decision allocation framework in which the parent company’s sustainable strategic decision-making is the leader and the allocation of financial,operational and personnel decision rights are coordinated.(2)It reveals for the first time the impact of parent-subsidiary decision rights allocation on CSR performance and the mechanism of action,which enriches the research on the governance effect of decision rights allocation.The concentration of parent company’s control over subsidiary’s decision making enhances the overall social responsibility performance through governance effect,resource effect and reputation effect,indicating that the fulfillment of social responsibility plays a key role in the overall social responsibility evaluation in enterprises with subsidiary business domination and high business complexity,and fills the gap in CSR research on the control of decision making power over subsidiaries.It fills the gap in CSR research on the control of decision rights of subsidiaries and helps reveal the role of decision rights allocation in sustainable development goals.In addition,compared with the previous analysis of a single decision-making dimension,this paper subdivides the decision rights allocation into three dimensions of financial power,management power and personnel power,and explores the different influence mechanisms of power allocation for different decision-making contents.(3)Focusing on the impact of resource allocation dominated by the decision rights allocation of parent companies on the overall social responsibility performance of listed companies in the lower internal capital market,this paper enriches the research on the influencing factors of organizational social responsibility.Different from the existing studies that treat listed companies as subsidiaries of a family group and focus on the impact of family group affiliation and resource competition in the upper internal capital market on corporate social responsibility,this paper reveals the key role of the decision rights allocation of listed parents and subsidiaries in the lower capital market in the allocation of resources in social responsibility activities,which provides a new perspective for the study of organizational social responsibility influencing factors.(4)This paper reveals the heterogeneous effects of the number of subsidiaries on the operational effects of decision structures.This paper finds that the number of subsidiaries has a heterogeneous effect on the contribution of decision rights allocation to the overall social responsibility performance of business groups,and there are differences in the effects of financial,operational and personnel rights allocation,clarifying that the number of subsidiaries affects the overall social responsibility performance by influencing the difficulty of parent company control and information transmission efficiency,introducing organizational characteristics into the study of decision rights allocation of social responsibility subjects,and providing theoretical support for the application of decision rights allocation in different scenarios. |
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