Suchergebnisse

Julia Maurer offers the first comprehensive conceptual and empirical approach to the relationships between foreign subsidiaries. She develops a novel framework for the analysis of intersubsidiary relationships and applies it to the large-scale plant engineering industry. The empirical study confirms that an MNC's strategic orientation has a considerable impact on its intersubsidiary relationships

International audience ; Manuscript Type: Empirical Research Question/Issue: This study examines the conditions under which foreign subsidiaries maintain active boards of directors. Active boards are in this study defined as boards which perform tasks beyond fulfilling local legal requirements. We focus on both monitoring and service roles. Research Findings/Insights: Based on a sample of 83 foreign subsidiaries operating in Belgium with headquarters in 14 different countries, we find that a foreign subsidiary is more likely to maintain an active board if it is a world mandate subsidiary, which has worldwide responsibility for a product line and performs a broad scope of value-added activities. Moreover, a foreign subsidiary is more likely to maintain an active board if it is larger relative to the multinational enterprise (MNE), if it has a higher level of local responsiveness, and if its past performance is poorer. Additionally, the presence of an active board in a foreign subsidiary is related to other control mechanisms deployed in the subsidiary. Theoretical/Academic Implications: Our results highlight the conditions under which foreign subsidiaries are likely to maintain active boards. Moreover, we provide empirical evidence that agency theory and resource dependence theory are relevant and complementary in the analysis of active boards in foreign subsidiaries. Practitioner/policy Implications: This study suggests that an active board may be a control mechanism to govern foreign subsidiaries and an instrument to deal with the external environment. Corporate governance regulators may consider developing governance recommendations that emphasize the importance of subsidiary boards in the oversight of foreign subsidiaries.

Research Question/Issue: This study examines the conditions under which foreign subsidiaries maintain active boards of directors. Active boards are in this study defined as boards which perform tasks beyond fulfilling local legal requirements. We focus on both monitoring and service roles.
Research Findings/Insights: Based on a sample of 83 foreign subsidiaries operating in Belgium with headquarters in 14 different countries, we find that a foreign subsidiary is more likely to maintain an active board if it is a world mandate subsidiary, which has worldwide responsibility for a product line and performs a broad scope of value-added activities. Moreover, a foreign subsidiary is more likely to maintain an active board if it is larger relative to the multinational enterprise (MNE), if it has a higher level of local responsiveness, and if its past performance is poorer. Additionally, the presence of an active board in a foreign subsidiary is related to other control mechanisms deployed in the subsidiary.
Theoretical/Academic Implications: Our results highlight the conditions under which foreign subsidiaries are likely to maintain active boards. Moreover, we provide empirical evidence that agency theory and resource dependence theory are relevant and complementary in the analysis of active boards in foreign subsidiaries.
Practitioner/policy Implications: This study suggests that an active board may be a control mechanism to govern foreign subsidiaries and an instrument to deal with the external environment. Corporate governance regulators may consider developing governance recommendations that emphasize the importance of subsidiary boards in the oversight of foreign subsidiaries.

This multifaceted, decision-oriented case requires you to address several issues in performance evaluation in an international context. In the process of reviewing the annual performance of its foreign subsidiaries, Falcon's CEO raises concerns about the performance evaluation metric and the effect of exchange rate changes on the competitive positions of foreign subsidiary managers in Denmark and Japan. The case requires you to assess the strengths and weaknesses of Falcon's performance evaluation system, examine the appropriateness of country managers' responses to exchange rate changes, understand the difference between evaluation of business units and their respective managers, and recommend improvements in the performance evaluation system.

AbstractManuscript TypeEmpiricalResearch Question/IssueWe examine determinants of cash holdings in Chinese subsidiaries of US multinational corporations (MNCs), a setting where growth opportunities make cash holdings desirable for investment opportunities but also vulnerable to potential expropriation because of poor investor protection.Research Findings/InsightsWe show that headquarters accumulate larger cash holdings in foreign subsidiaries with locally registered patents and in foreign subsidiaries operating in the same industry as corporate headquarters. Further, foreign cash holdings are higher when these are safeguarded by a subsidiary board. Moreover, the effect of shared industry on subsidiary cash holdings is larger when a board is installed in the subsidiary. Finally, the positive relation between a subsidiary's capability to innovate and to transfer knowledge and its level of cash holdings is stronger when the subsidiary is led by US expatriate CEOs.Theoretical/Academic ImplicationsOur results indicate that MNCs accumulate cash in foreign subsidiaries with innovation and knowledge transfer capabilities. Furthermore, and in line with agency theory, we find that MNCs safeguard foreign cash via the installing of subsidiary boards and expatriate CEOs. These findings suggest that the installing of monitoring devices are crucial in reducing the potential expropriation risk of foreign cash holdings.Practitioner/Policy ImplicationsOur study highlights the importance of considering foreign subsidiaries' positions in innovation and in knowledge transfer when MNCs make decisions on the levels of overseas cash holdings. It offers insights regarding the importance of subsidiary boards and expatriate CEOs in monitoring and controlling foreign subsidiaries.