Critical search for corporate control methods in Parent firms

Subject Areas : Islamic Marketing

Parinaz  Arabzadeh ¹ (PhD student of Industrial Management, Qazvin Branch, Islamic Azad University, Qazvin, Iran.)
Hamed  Rahmani ² (Department of Public Administration, Qazvin Branch, Islamic Azad University, Qazvin, Iran.)
Ali  Mohtashami ³ (Department of Industrial Management, Qazvin Branch, Islamic Azad University, Qazvin, Iran.)

Received: 2023-03-27 Accepted : 2023-06-06 Published : 2023-05-22

Keywords: Strategic Control, Critical appraisal, financial control, interactive control, parent firms,

Abstract :

Although the expansion of parent firms is of great importance to economic development and their central role in the administration of diverse businesses and value creation is undeniable, one of the main concerns of these firms and managers of subsidiaries is how to establish relationships or in other words corporate control. Parent firms can control the entire business process of subsidiaries, and this control can be introduced in the form of three styles of strategic planning, financial control and strategic control, which is commonly known as parent control in theoretical literature. However, the complexity of environmental conditions and increasing uncertainties will not allow the adoption of a fixed control style to meet the goals of the parent firms. Therefore, creating an interactive and scenario -based control system is recommended for subsidiaries for long-term survival. In this article, by reviewing the literature on parent firms control and a critical view of the popular methods and styles of controlling  subsidiary companies, a new method with an emphasis on participation, interaction and internalization of strategic decisions is presented to cover the current shortcomings and offer a more effective control of firms in changing environments. In the current study, the different categories of parent firms along with their configuration and managerial styles under different conditions, the proportion of characteristics, size, diversity and value -making practices are explained and compared. This review article can be effective for corporate control and can open a new horizon for future researchers to analyze the different styles of parent firms under uncertainty.