Study On Relationship Between Parent-Subsidiary Culture Control And Subsidiary Effectiveness

As a new control method, parent-subsidiary culture control has attracted the attention of academia. However, there was no formal scale to measure the extent of culture control, and few people researched the relationship between culture control and subsidiary effectiveness. Therefore, selecting effective methods to develop the culture control scale and then testing the correlation between culture control and subsidiary effectiveness can become the new topics of academic study.Cultural control is that the parent companies make use of vision and shared values to manage subsidiaries. It can be grouped into two levels, which are values level and code of conduct level. This study developed the Culture Control Scale suitable for China's national conditions by in-depth analyzing culture control theory, interviewing with experts and business people and making use of rigorous data processing methods which included item analysis, factor analysis and reliability analysis. Consequently, the Culture Control Scale includes four dimensions, which are culture training and communication, shared values, collaboration and integration and system coherence.Using a newly developed culture control scale, as well as a revised subsidiary effectiveness scale according to existing research, this study developed the Parent-Subsidiary Culture Control and Subsidiary Effectiveness Questionnaire, and conducted a questionnaire survey to subsidiaries of the national large enterprise groups. This study validated the correlation between culture control and subsidiary effectiveness by using correlation analysis and multiple regression analysis, and further tested moderator effects of subsidiary industry type and business relevance to relationship of the two by using grouping multiple regression and hierarchical multiple regression. Empirical results are as follows.In the first place, generally speaking, higher extent of culture control can increase subsidiary effectiveness, while in the dimensions of culture control, only strengthening the extent of two dimensions which are TC and CI can significantly increased subsidiary effectiveness.In the Second place, generally speaking, industry types of subsidiary can impose different impacts on correlation between culture control and subsidiary effectiveness, and emerging industries produce more significant impacts than traditional industries And emerging industries can also make the correlation between each dimension of culture control and subsidiary effectiveness more significant.In the Third place, generally speaking, higher business relevance can make the relationship of culture control and subsidiary effectiveness closer, while in the dimensions of culture control, business relevance has significant moderator effect only to the relationship of system coherence and subsidiary effectiveness.In the future management, parent companies can adopt different means of control according to subsidiary industry types and business relevance. For subsidiaries engaged in emerging industries, parent companies should form shared values, strengthen collaboration and integration between parent and subsidiary companies, strengthen culture training and communication, and form culture management system in detail. For subsidiaries engaged in traditional industries, parent companies should mainly strengthen collaboration and integration and should not give too many restrictions to subsidiaries in the system. For high-business-related subsidiaries, parent companies may pay attention to system coherence between parent and subsidiary companies.