Centralization in Headquarters–Subsidiary Relationships
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Abstract
Research to date on centralization in MNCs has produced many inconsistent findings. The present study attempts to add clarity to the situation by re-testing many of the existing hypotheses with data from a recent study of centralization in 50 large US, UK and European MNCs. It examines how the degree of centralization inherent in the headquarters-foreign subsidiary relationship varies in response to a variety of company-wide and subsidiary level conditions. The influence of company-wide conditions on centralization appears to be much clearer than the influence of subsidiary-level conditions. The study also identifies several new contingency patterns that appear to be at work in MNCs today.