A Study On The Control Mode Of Regional Branches Viewed From Legitimacy

Regional economic integration, the rapid development of information technology andencouragement of national policies is the background of Chinese enterprises. In order toobtain a more flexible response and a breakthrough for local resources in different parts,business expansion in China along with the process of setting up regional branches across thenumber of businesses continues to grow. In this process, how to manage and controlheadquarters in the branches in different regions must be considered a strategic issue.This article attempts to integrate the related research of resources-based theory view,market-based view and institutional view, perspectives from the legitimacy to take cross-casestudies, research the impact on the control model of branches. Through the research toexisting literature, along with clear the research questions and priorities, our study build amechanism of control mode, through a case study for Livzon, to improve the conceptualmodel and theoretical development, and then through logical method of reproduction used formanagement practices of Kangmei, improve this article formed the basis of the theoreticalmodel.This study shows that: the institutional distance, the position of subsidiaries and parentcompanies dependency status affecting the joint effect of corporate control model for thechoice of branch offices. The legitimacy tendency is the intermediary model variable betweenthe factors and the control mode. Institutional distance has a positive correlation with theexternal legitimacy; the position of subsidiaries and parent companies dependency status hasa positive correlation with internal legitimacy; the influence of the parent firm to environmenthas a negative regulatory role of external legitimacy. When an enterprise has a tendency ofthe external legitimacy, it will use the control model of financial management, and when anenterprise has a tendency of the internal legitimacy, it will use the control model of operatemanagement, when enterprises are facing internal and external legitimacy in equilibrium, thefirm will use the control model of strategic management.