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Journal articles on the topic 'Parent and subsidiary company'
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1
Gammelgaard, Jens. "Issue Selling and Bargaining Power in Intrafirm Competition: The Differentiating Impact of the Subsidiary Management Composition." Competition & Change 13, no. 3 (September 2009): 214–28. http://dx.doi.org/10.1179/102452909x451341.
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This paper reports the findings from five case studies on Danish-owned subsidiaries in China and India and demonstrates how a subsidiary's issue-selling strategy influences its bargaining power in intrafirm competition within a multinational corporation. Issue-selling strategies of subsidiaries involve various activities aiming at (a) making the parent company understand an issue, (b) attracting parent-company attention to an issue, and (c) lobbying for an issue at the parent company. Next to illustrating these activities, the empirical part of the paper shows that subsidiaries managed by parent-company nationals have more bargaining power than subsidiaries managed by host-country nationals. To begin with, parent-company national subsidiary managers are better at translating the context-specific information deriving from cultural distances between the parent company and the subsidiary. Second, they are better at packaging the issue in order to match parent-company formalised application requirements. Further, they are better at framing the issue to match the parent-company goals and objectives. And last, they often have closer relationships with decision makers within the parent company.
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Aristova, Ekaterina. "JURISDICTION OF THE ENGLISH COURTS OVER OVERSEAS HUMAN RIGHTS VIOLATIONS." Cambridge Law Journal 75, no. 3 (November 2016): 468–71. http://dx.doi.org/10.1017/s000819731600074x.
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IN Lungowe v Vedanta Resources Plc [2016] EWHC 975 (TCC), the High Court allowed a claim to be heard in England against parent company incorporated in England and its foreign subsidiary in relation to the overseas subsidiary's operations. The judge considered whether the claim against the English-domiciled defendant could be stayed on the basis of forum non conveniens, and whether jurisdiction could be established over its foreign subsidiary as a necessary and proper party to the case. The overall analysis of the judgment suggests that (1) the claims against the parent company in relation to the overseas operations of the foreign subsidiary can be heard in the English courts and (2) the existence of an arguable claim against the English-domiciled parent company also establishes jurisdiction of the English courts over the subsidiary even if the factual basis of the case occurs almost exclusively in the foreign state.
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Chasteen, Lanny G. "Equity Method Accounting and Intercompany Transactions." Issues in Accounting Education 17, no. 2 (May 1, 2002): 185–96. http://dx.doi.org/10.2308/iace.2002.17.2.185.
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In their consolidated statements chapters, most advanced accounting texts include a presentation of the “full” or “complete” equity method from the standpoint of the parent company. Under this method, the parent company adjusts its accounts for intercompany transactions with the subsidiary, in addition to accounting for its share of the subsidiary's net income and dividends (the “simple” equity method) and for differences between the price paid and its share of the underlying book value of the subsidiary (the “partial” equity method). In these texts, many entries made by the parent company to adjust its accounts for unrealized profits on intercompany transactions would require modification if the parent issued “parent only” statements, or if the subsidiary was not consolidated (or an investor/investee relationship instead of a parent/subsidiary relationship existed). The purpose of this paper is to discuss and illustrate parent/investor accounting for these intercompany transactions when the parent/investor uses the full equity method, but does not consolidate. Although the advanced texts provide the correct consolidating working paper techniques and resulting consolidated statements, the parent company's need to issue “parent only” statements (a one-line consolidation) makes these issues important. This paper's modified approach is also important regarding an investor/investee relationship in which the investor has significant influence, but not control, over the investee. The paper could be useful for students in advanced accounting courses or in intermediate accounting courses where the equity method is introduced and covered in some detail.
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Sari Sumantri, Made Gede Niky. "Tanggung Jawab Atas Kebijakan Yang Diterapkan Oleh Perusahaan Induk Kepada Perusahaan Anak Yang Berakibat Pada Timbulnya Suatu Kerugian." Acta Comitas 5, no. 1 (April 30, 2020): 172. http://dx.doi.org/10.24843/ac.2020.v05.i01.p15.
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Liability to the parent company for policies implemented by subsidiaries that result in losses with third parties is a major problem in the practice of group. This problem This problem is due to absence of legislation that specifically regulate of the company group, the regulatory framework of the realationship the parent and it’s subsidiaries in the group companies is use Corporate Law. The incorporation of the company’s subsidiary in the group does not abolish the legal status of a subsidiary. Parent companies in the group company contractions have immunity over the implementation of the principle of limited liability. the purpose of writing this journal is to know, how is the assignment legal liability to the parent company for the policies applied to the subsidiary companies resulting in a loss to a third party and how to anticipate control without legal liability the parent company for its policies that impact the economic insecurity of the subsidiary in the construction of group companies. The research that the author uses is normative legal research. From this research, assigning legal liability to the parent company through the implementation of policies implemented by the subsidiary is certainly seen from the fault that cause losses. One effort that can be done to anticipate control without legal liabilty of the parent companies it’s Make Charter Corporate Relations and Between Subsidiaries or make agreement control between the parent company and subsidiary.
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Chugunova, K. Yu. "Features of the Formation of the Will of Joint-Stock Companies Subsidiaries with Predominant State Participation (The Case of Russian Railways)." Actual Problems of Russian Law 15, no. 10 (October 29, 2020): 116–24. http://dx.doi.org/10.17803/1994-1471.2020.119.10.116-124.
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In the paper, the author examines the independence of joint-stock companies subsidiaries with predominant state participation in decision-making through the prism of the practice of building corporate governance at JSC 'Russian Railways'. The author sets the task to study the limits of participation of the main company in the formation of the will of the management bodies of a subsidiary company using the example of one of the largest Russian joint-stock companies with state participation. The author concludes that the parent company has virtually unlimited powers in determining the subsidiary's decisions, which is generated by the broad approach of the legislator to the definition of the subsidiary. For the first time, the paper identifies two independent forms of determining the decisions of a subsidiary by the main company, which are actively used in practice, but without direct consolidation at the legislative level. They are as follows: the direction to the subsidiaries by the main company of draft local regulations subject to approval by the management bodies of the subsidiary; and issuance by the parent company of instructions for voting at the annual general meeting and the meeting of the board of directors of the subsidiary. The author notes that under the conditions of unlimited powers of the parent company when determining the decisions of the subsidiary company there is the risk of transformation of subsidiaries of joint-stock companies with predominant state participation into nominal structures not interested in high-quality corporate governance, blindly fulfilling the will of the parent company. The material presented in the paper can be used both in further scientific research when studying the issue of independence of subsidiaries of joint-stock companies with predominant state participation, and by practicing lawyers working in joint-stock companies with state participation and their subsidiaries, as well as by state bodies participating in the improvement of corporate law.
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Bakanauskas, Edvinas. "Analysis of the Parent Company and a Subsidiary Company Concept in Article 5 of the Law on Companies of the Republic of Lithuania." Teisė 115 (June 29, 2020): 70–85. http://dx.doi.org/10.15388/teise.2020.115.5.
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The present article analyses the concept of a parent and a subsidiary company as defined in Article 5 of the Law on Companies of the Republic of Lithuania. The article also examines the relationship between companies, the concept of control, evaluates concept of parent company and subsidiary in the context of European Model Company Act (EMCA).
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Long, Yining. "The Fundamental Need of Reform in Company Law in England: Parent Company’s Liability for Debt of Insolvent Subsidiary." Journal of Finance Research 4, no. 2 (November 3, 2020): 151. http://dx.doi.org/10.26549/jfr.v4i2.5511.
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Based on the fact that the parent company has actual control over the subsidiary company, this paper analyzes the possibility of the parent company using the subsidiary company to seek benefits and damage the interests of creditors. Moreover, under the intangible protection of the current limited liability system and the independent personality of the company, it can “retreat”. This is undoubtedly against the original intention of the establishment of enterprise groups and has great potential harm to creditors. In addition, on the basis of the relief measures for the rights and interests of the parent company caused by the bad behavior of the subsidiary, the legal defects that should be carefully considered are determined. Considering whether there are other remedies that may have the same effect as disclosure, some are more moderate than disclosure. With Britain’s strong caution about lifting the veil, a more moderate direction could be considered.
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Lo, Fang-Yi, and Ricky Tan. "Determinants of international subsidiaries’ performances." International Journal of Emerging Markets 15, no. 4 (November 25, 2019): 746–66. http://dx.doi.org/10.1108/ijoem-06-2019-0445.
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Purpose One important strategy Multinational Enterprises (MNEs) employ to compete in the global market is to engage in foreign investment, but firms must know how they can perform better in the host country market. International subsidiaries’ performances play a chief role for MNEs’ globalization strategy. The purpose of this paper is to construct multi-level research with parent-level data at the higher level and subsidiary-level data at the lower level. Design/methodology/approach This study helps capture the rapid growing trend in emerging markets and uses a sample of Taiwanese enterprises and their subsidiaries in China. The data come from the Taiwan Economic Journal database. Precisely, the authors obtain 711 Taiwanese MNEs and 4,458 of their subsidiaries in China. Findings This study finds among the parent company’s attributes that firm size, firm total performance, depth of internationalization and foreign shareholding have significant impacts on subsidiary performance, while within the subsidiary’s attributes, subsidiary size, subsidiary-owned capital and total investment fund significantly affect subsidiary performance. Originality/value In order to capture subsidiary performance, this study uses a multi-level analysis approach with the Hierarchical Linear Model statistic method to separate parent company attributes and subsidiary-owned attributes as two distinct levels. This method fills the gap in the literature by analyzing subsidiary performance and clarifying that foreign direct investment is a multi-level phenomenon that cannot be analyzed using a one-level analysis method.
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Kravtsova, Tetiana, and Ganna Kalinichenko. "The vicarious liability of parent company liability for its subsidiary." Corporate Ownership and Control 14, no. 1 (2016): 684–91. http://dx.doi.org/10.22495/cocv14i1c4art15.
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The paper is of a theoretical nature and provides with more complete understanding of the vicarious liability, different concepts of the vicarious liability and peculiarities of the vicarious liability of parent company for its subsidiary. The paper does not provide an empirical investigation. First of all, the main finding of the paper is that the vicarious liability is complex and is by nature of combination of fault and strict liability and involves three actors and two-level relationship. Secondly, a parent company may be held liable in parallel with its subsidiary on the basis on its own negligent conduct and on the basis of the vicarious liability. Thirdly, it is important to distinguish between the direct liability of the parent company as a result of breach of a duty of care and vicarious liability as a result of piercing of the corporate veil.
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Koffman-Xaba, Amanda, and Geoff A. Goldman. "Corporate social responsibility of a multinational bank and its South African subsidiary." Banks and Bank Systems 11, no. 1 (April 25, 2016): 23–33. http://dx.doi.org/10.21511/bbs.11(1).2016.03.
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Africa has become increasingly attractive to foreign investors, but the establishment of operations in emerging markets poses challenges for multinationals. One such challenge is implementing of corporate social responsibility (CSR) effectively across all subsidiaries. This study aims to determine whether there are differences in CSR expectations and praxis between a multinational bank and its subsidiary operating in South Africa. Through qualitative research methods, a case study research design approach was utilized to study CSR activities in the parent company and CSR activities in its South African subsidiary. Data collected from ten interviews are analyzed using open, axial and selective coding procedures. The study concludes that there are nuanced gaps in CSR expectations, and between the parent company and its South African subsidiary. Global CSR strategies may be applied consistently across subsidiaries, but they do not necessarily address core issues faced in emerging economies, placing doubts upon the practicality of these efforts
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김상헌. "Potential Lawsuit Risk and Auditor Conformity of Parent-Subsidiary Company." Korea International Accounting Review ll, no. 55 (June 2014): 173–90. http://dx.doi.org/10.21073/kiar.2014..55.010.
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Somadiyono, Sigit. "Kedudukan Hukum Anak Perusahaan Badan Usaha Milik Daerah." Wajah Hukum 5, no. 1 (April 26, 2021): 403. http://dx.doi.org/10.33087/wjh.v5i1.428.
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Subsidiary is a company that was born due to the transfer or participation of majority shares by another company or it is called the parent company. There are no regulations related to subsidiaries in the laws and regulations related to companies or regarding Regional Owned Enterprises. This has resulted in confusion regarding the position of the regional-owned company subsidiaries, especially the unclear position of state finances in the subsidiary companies. The problem in this research is what is the legal status of ownership of a regional-owned company subsidiary? And what is the responsibility of the holding company of a Regionally Owned Company to its subsidiaries? The purpose of this study was to determine the legal status of the subsidiary and the responsibilities of the Regional Owned Company as the holding company. The research method used is normative juridical analysis of the laws and regulations and the theory of the jurists. From the results of the research, it is found that even though the status is a subsidiary of a Regional Owned Enterprise, the subsidiary is not owned by the Regional Government but has a private or private status, so that there is no special binding legal relationship between the Regional Government as a shareholder of a Regional Owned Enterprise and its owned subsidiary Regional owned enterprises. The responsibility of a Regional Owned Company as the holding company with its subsidiary is limited to the relationship between the shareholders and the company as stipulated in Law Number 40 of 2007 concerning Limited Liability Companies.
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Gul, Ferdinand A., Audrey Wen-hsin Hsu, and Sophia Hsin-Tsai Liu. "Parent-Subsidiary Investment Layers and Audit Fees." Journal of Accounting, Auditing & Finance 33, no. 4 (May 8, 2017): 555–79. http://dx.doi.org/10.1177/0148558x17696763.
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This study investigates whether the number of investment layers within a parent-subsidiary consolidated group is associated with a firm’s audit fees. Using a unique sample of publicly traded Taiwan companies, which are required to disclose information on all of their affiliates, we measure the number of vertical layers in the parent-subsidiary relationship, from the parent company to the lowest-tiered subsidiary. Our results show a positive association between audit fees and the number of investment layers. In addition, we find that the positive association between audit fees and the number of layers becomes stronger for firms which have more investees located in tax haven countries. Our results also show that the positive association between audit fees and the number of investment layers is more pronounced as companies’ engagement in related-party transactions increases. Overall, the results support the argument that auditors attach higher audit risks to firms with more investment layers and therefore charge higher audit fees.
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Rodrigues, Margarida, Maria do Céu Alves, Cidália Oliveira, José Vale, and Rui Silva. "The Impact of Strategy, Environment, and the Management System on the Foreign Subsidiary: The Implication for Open Innovation." Journal of Open Innovation: Technology, Market, and Complexity 7, no. 1 (February 1, 2021): 51. http://dx.doi.org/10.3390/joitmc7010051.
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With globalisation, there has been an intensification of investments by foreign groups in sectors strategic to their country of origin, such as some minerals. It is, therefore, crucial for a parent company to implement specific controls in its management control systems. In these circumstances, this study aims to determine the degree of control exercised by the parent company over a subsidiary in cultural and organisational dimensions. In addition, other exogenous factors (entities and external factors) influence this system. The results obtained showed that the parent company had an influence on the Management Control System (MCS) of the subsidiary and changed the way control was exercised there, but was unable to deal with macroeconomic instability, environmental and strategic uncertainty, and, consequently, the management risk involved in the extractive activity; in this case, for this subsidiary to operate a seam mine and not be aware of it since it is essentially a commercial, economic group. In addition to these effects on the organisational dimension and the cultural dimension, the shareholders were unable to integrate the subsidiary’s organisational and local culture, which generated some dynamic tension with the expatriate. In addition to the theoretical framework used, it was confirmed that the Flamholtz model is passive to implement in industries in general, particularly in the extractive industry. Finally, some final considerations were made about the management control system, in which the argument is reinforced that there must be empathy between the local staff and the expatriate, as a representative of the shareholders, in order for this system to be a vehicle for the effective transfer of knowledge between both parties, as well as to be supported by open innovation.
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Su, Yi, Wen Guo, and Zaoli Yang. "Reverse Knowledge Transfer in Cross-Border Mergers and Acquisitions in the Chinese High-Tech Industry under Government Intervention." Complexity 2021 (January 4, 2021): 1–18. http://dx.doi.org/10.1155/2021/8881989.
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The high-tech industry is the main force promoting the development of China’s national economy. As its industrial economic strength grows, China’s high-tech industry is increasingly using cross-border mergers and acquisitions (CBM&A) as an important way to “go out.” To explore the rules governing the process and operation mechanism of reverse knowledge transfer (RKT) through the CBM&A of China’s high-tech industry under government intervention, a tripartite evolutionary game model of the government, the parent company, and the subsidiary as the main subjects is constructed in this paper. The strategies adopted by the three subjects in the RKT game process are analysed, and the factors influencing RKT through CBM&A under government intervention are simulated and analysed using Python 3.7 software. The results show that, under government intervention, the parent company and subsidiary have different degrees of influence on each other. Subsidiaries are highly sensitive to the compensation rate of RKT. Positive intervention by the government tends to foster stable cooperation between the parent company and the subsidiary. However, over time, the government gradually relaxes its intervention in the RKT and innovation of multinational companies.
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Schweizer, Roger. "Headquarters–Subsidiary Relationships during Dramatic Strategic Changes—The Local Implementation of a Global Merger between MNCs in India." Review of Market Integration 2, no. 1 (April 2010): 101–34. http://dx.doi.org/10.1177/097492921000200107.
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This article, using an in-depth single case study approach, studies the local integration process between two globally merging multinational companies’ (MNCs) subsidiaries in India. The focus is on the interplay between the parent company and the subsidiary level during the local implementation of such a global strategic decision. The article shows that the parent company does not in detail coordinate and control the local implementation due to (a) an in-beforehand strictly defined framework and (b) the existing vacuum in MNC internal values and norms. The article further suggests that the strategic importance of a subsidiary’s market is positively and the degree of perceived resemblance between the parent’s home country and the subsidiary’s local environment is negatively related to the degree of parental involvement. Finally, the article suggests that subsidiaries’ reactions towards parental involvement are influenced by: (a) the type of involvement/coordination mechanisms used, (b) the local institutional environment and (c) the relational context.
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Kusuma, Ng Catharina Enggar, and Fl Yudhi Priyo Amboro. "Doing the Corporate Business with Piercing the Corporate Veil Doctrine: Indonesia, Us And Uk Perspective." Sociological Jurisprudence Journal 3, no. 2 (August 7, 2020): 126–29. http://dx.doi.org/10.22225/scj.3.2.1832.126-129.
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The absence of piercing the corporate veil doctrine in the Indonesian company law shows that the subsidiaries of such corporate groups are considered a separate legal personality, hence it is probably almost impossible to held the parent company liable for its subsidiaries’ legal actions under any conditions. This research adopted a normative legal research with a comparative law study method. The goal of this research is describe the implementation of piercing the corporate veil doctrine in Indonesia, US and UK, then to make the points of contribution of this doctrine to be regulated properly in Indonesia. In fact, piercing the corporate veil doctrine is implemented in Indonesia, although there was not any normative legal basis of the doctrine itself, whereas in US and UK, the doctrine is implemented and further developed through precedents. Therefore, since there is an evident relationship between a parent company and its subsidiary, whereby in certain cases the parent company can and should be held liable for the acts of its subsidiary, there should be a more explicit regulation regarding both corporate groups and piercing the corporate veil doctrine.
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Verbeke, Alain, and Wenlong Yuan. "The impact of “distance” on multinational enterprise subsidiary capabilities." Multinational Business Review 24, no. 2 (July 18, 2016): 168–90. http://dx.doi.org/10.1108/mbr-05-2015-0021.
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Purpose The aim of this paper is to investigate how multinational enterprise (MNE) subsidiary capabilities are influenced by the firm-specific advantages (FSAs) of the parent company, as well as by cultural and geographic distance between the home and host country. Design/methodology/approach This paper assesses how the effects of the parent FSAs, cultural distance and geographic distance on subsidiary capabilities vary for different value-chain activities, with an empirical application to 60 foreign subsidiaries operating in Canada. Findings This paper uncovers distinct, three-way interaction effects among parent-level FSAs, cultural distance and geographic distance for upstream versus downstream activities in the value chain. Originality/value We find that in special cases, high levels of distance can be positive for MNEs, in terms of driving the creation of stronger subsidiary capabilities.
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Gavidia, Jose V. "Impact of parent-subsidiary conflict on ERP implementation." Journal of Enterprise Information Management 29, no. 1 (February 8, 2016): 97–117. http://dx.doi.org/10.1108/jeim-03-2014-0034.
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Purpose – In spite of the large body of literature on success factors of enterprise resource planning (ERP) implementation, there is a need to explore its multinational dimension. The purpose of this paper is to explore the impact of the conflict between parent and subsidiary on the process of ERP implementation in a multinational enterprise (MNE). Design/methodology/approach – Using an interpretive case study methodology, this paper analyses the theoretical frameworks of parent-subsidiary conflict and applies them to interpret an in-depth case study and generate a set of managerial prescriptions. Findings – Theoretical analysis and case evidence suggest that managing parent-subsidiary conflict is a critical success factor of ERP implementation in MNEs. Research limitations/implications – This case relates to a diversified multinational group producing a variety of materials through subsidiaries. The data collection includes multiple sources in the company, and strong theoretical development provides a high level of generalizability. The paper shows that managers should consider the impact of conflict from the planning stages of any multinational ERP implementation. Practical implications – A detailed set of practical managerial prescriptions is derived from case and theoretical analysis. These prescriptions provide guidance to multinational managers planning a successful global ERP rollout. Originality/value – Although parent-subsidiary conflict is clearly a major factor in multinational ERP implementations, this topic has never been analysed in detail in the literature. This paper breaks new ground applying grounded theoretical frameworks of parent-subsidiary conflict to an implementation case, and providing managerial guidance for implementation decisions.
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Grušić, Uglješa. "RESPONSIBILITY IN GROUPS OF COMPANIES AND THE FUTURE OF INTERNATIONAL HUMAN RIGHTS AND ENVIRONMENTAL LITIGATION." Cambridge Law Journal 74, no. 1 (March 2015): 30–34. http://dx.doi.org/10.1017/s0008197315000197.
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EVER since the establishment of separate legal personality of companies and their limited liability in the nineteenth century, there have been attempts by voluntary and involuntary creditors of the insolvent or dissolved subsidiary to obtain remedies from the parent company. The orthodox view is that the parent company is neither responsible for the acts and omissions of the subsidiary nor liable for its debts. The Court of Appeal in David Thompson v The Renwick Group plc [2014] EWCA Civ 635 confirmed that the exceptions to this orthodoxy apply only in truly exceptional circumstances. As discussed below, the importance of this judgment extends into the realm of international human rights and environmental litigation and has the potential to set back the existing efforts within the European Union to ensure effective judicial remedy for corporate abuses.
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송순영 and 김상헌. "The Relationship between Auditor conformity of Parent-Subsidiary Company and Earnings Management." Korea International Accounting Review ll, no. 53 (February 2014): 1–18. http://dx.doi.org/10.21073/kiar.2014..53.001.
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KOLCHUGIN, Sergei V. "Anomalies of the control principle as part of the consolidated financial reporting concept." International Accounting 22, no. 1 (January 15, 2021): 24–47. http://dx.doi.org/10.24891/ia.24.1.24.
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Subject. The article discusses the impact of the control principle on the existing consolidated financial reporting concept. Objectives. I evaluate possible alterations in the consolidation methodology as a result of the anomaly of the control principle. Methods. The study is based on the method of analogy for scientific hypothesizing. The study methodologically relies upon Thomas Kuhn's paradigm shift theory and the impact of anomalies on methodological principles of normal science. The study combines the analysis and synthesis, induction and deduction, and the method of comparison when analyzing the existing control criteria and identifying anomalies of the control principles as part of the consolidated financial reporting concept, and examining how the anomaly influences the consolidation methodology. Results. I discovered that the control principle in the consolidated financial reporting concept influences the consolidation methodology. I suggest using my own methodological approach to preparing consolidated financial statements in case of the non-equity control the parent company holds over its subsidiary. Conclusions and Relevance. The control principle in the consolidated financial reporting concept has not been formalized, thus causing anomalies affecting methodological principles of consolidated financial reporting. The non-equity control of the parent company over its subsidiary is a case in point. This control induces unavoidable changes in the consolidation methodology. The findings can be used to prepare consolidated financial statements in case of the non-equity control of the parent company over its subsidiary.
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Friesl, Martin, Lionel Garreau, and Loizos Heracleous. "When the parent imitates the child: Strategic renewal through separation and reintegration of subsidiaries." Strategic Organization 17, no. 1 (August 24, 2018): 62–94. http://dx.doi.org/10.1177/1476127018794850.
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This article shows how the separation and subsequent reintegration of a subsidiary becomes a source of strategic renewal for the parent company. We develop a process model that reveals how structural ambidexterity can generate “proximate isomorphism” that gives rise to parent level exploration and the parent’s gradual convergence with the subsidiary. This creates the conditions for reintegration, and ultimately, strategic renewal. We identify the triggers for proximate isomorphism as well as the mechanisms through which it unfolds. We draw on the longitudinal analysis of strategic renewal of Immochan between 2006 and 2018. Our findings contribute to extant research by developing the link between structural ambidexterity and strategic renewal and, particularly, by showing that proximate isomorphism acts as an integrating mechanism between the parent and the explorative unit.
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Akolaa, Andrews Adugudaa. "Foreign market entry through acquisition and firm financial performance." International Journal of Emerging Markets 13, no. 5 (November 29, 2018): 1348–71. http://dx.doi.org/10.1108/ijoem-05-2017-0162.
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Purpose The international market entry strategy by acquisition is one of the critical options for success in international business. The decision to acquire a local firm is expected to impact the post-entry financial performance of the local firm as the acquirers come with proprietary advantages to improve the overall performance of the acquired company. The purpose of this paper is to empirically examine the post-acquisition financial performance of acquired foreign subsidiaries and comparable unacquired local firms in Ghana to determine the effect of foreign acquisition on the financial performance of the local subsidiaries. Design/methodology/approach A quantitative approach was adopted in this study. A sample of 100 locally acquired and non-acquired firms were studied using purposive and convenience sampling method. The research adopted the propensity score matching and the differences in difference methodologies to determine the returns on assets (ROA) of non-acquired local firms and acquired foreign subsidiaries are compared one year pre-acquisition t1 to two years post-acquisition t2. Findings The results demonstrate a higher post-acquisition financial performance of locally acquired foreign subsidiaries in relation to their local counterparts in Ghana. Firms with pre-acquisition modernized ownership structures performed better than state-owned firms and firms with high pre-acquisition absorptive capacity outperformed firms with lower pre-acquisition absorptive capacity. The results also indicate that ROA for acquired local firms in the year of acquisition drops in relation to the year prior to acquisition Research limitations/implications A major limitation of this research is that the relative capability of the parent companies and experience in the transfer of knowledge to the acquired local subsidiaries was not considered. The real impact of the various multinationals would have revealed how the capability and competencies of the different parent companies whose subsidiaries this study considered in the paper make a difference in their performance. The study did not also consider the value of parent company participation in the local management of the acquired subsidiaries. Whereas some acquired firms had parent company staff participating in the local management, others did not have same, thus challenging the performance results without any control of this variable. The other limitation of this research is the fact that it did not also consider the experience of the parent company as a factor that can influence the performance of the subsidiary. The more experienced the parent company is in engaging foreign markets, the more likely the support for the subsidiary will result in higher performance as parent company brings previous learnings. Another limitation of this study is that it measures the financials only (ROA) and hence does not provide a 360° assessment of the subsidiary performance, which includes the operational and overall subsidiary effectiveness. This research has not empirically examined all aspects of foreign acquisitions in Ghana and thus has many aspects for future exploration that other researchers may focus on. The paper has not considered the experience and capability of the parent company to transfer technology, innovation and all the advantages of multinationals to the post-acquisition performance of subsidiaries. More experienced multinationals are most likely to transfer knowledge faster to subsidiaries than less experienced ones, thus likely to show better performance post-acquisition than the less experienced ones. The effect of this phenomenon has not been considered in this study. Parent company participation in the local management of the subsidiary can also make a difference in the post-acquisition performance equation but this has not been considered in this research. Some parent companies actively participate in the local subsidiary management as management support for the subsidiary. This might have some effect on the subsidiary post-acquisition performance but this study does consider this. Other researchers may want to look into this factor. Future researchers may also assess the differences in performance of subsidiaries that are wholly owned and partial owned in Ghana. The performance of Greenfield joint ventures and local firm acquisitions can also be studied. Practical implications Findings of this research has implications for firms using acquisition as foreign market entry strategy to inform the choice of local partners to select for acquisitions as pre-acquisition ownership structure and absorptive capacity of local Ghanaian firms impact post-acquisitions performance. Ghanaian firms also seeking to attract foreign investments into their businesses will also find the results useful as they organize to meet prospective acquirers’ expectations, for example, building their human capacity and ownership structures, developing export and ensuring debt rations to attract potential acquirers. Originality/value Acquisitions as an international market entry strategy continue to gain grounds with lots of research in the area. However, there is scanty research on post-acquisition financial performance, especially in the developing country context, and this paper fills that yawning knowledge gap by comparing acquired and non-acquired local firms in Ghana to determine if foreign acquisitions lead to better ROA.
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White, Tom. "Nothing to See Here? The Extension of Parent Company Liability in James Hardie Industries plc v White." Victoria University of Wellington Law Review 51, no. 1 (June 22, 2020): 155. http://dx.doi.org/10.26686/vuwlr.v51i1.6522.
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In James Hardie Industries plc v White, the New Zealand Court of Appeal considered circumstances where a parent company could be directly liable for defective products produced by its subsidiary while upholding the principles behind separate corporate personality. The Court passed off the case as an unexceptional development in the law, based on an application of ordinary tort law principles and supported by decisions from overseas jurisdictions. However, the Court neglected to consider the underlying policies of the cases it cited, ignored important distinctions between them and the present case and did not inquire into whether they were in fact relevantly applicable. In fact, the Court extended parent company liability for the acts and omissions of its subsidiary far beyond what courts in overseas jurisdictions have held. In doing so, the Court implicitly lifted the corporate veil and failed to acknowledge the impact such a finding of liability would have on the corporate form.
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Zhu, Ye, Wei Jiang, Xinyu Shi, and Yuntian Dai. "Research on the governance of parent-subsidiary company under the mixed ownership mode." IOP Conference Series: Materials Science and Engineering 792 (June 3, 2020): 012007. http://dx.doi.org/10.1088/1757-899x/792/1/012007.
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Anderson, Helen. "Parent company liability for asbestos claims: some international insights." Legal Studies 31, no. 4 (December 2011): 547–69. http://dx.doi.org/10.1111/j.1748-121x.2011.00202.x.
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Throughout the world, the corporate group structure has long proved troublesome to the creditors, and particularly the tort creditors, of undercapitalised subsidiary companies. In the wake of Australia's James Hardie asbestos compensation inquiry, Senior Counsel assisting the Jackson Special Commission, Mr John Sheahan QC, called for the Commission to ‘recommend reform of the Corporations Act so as to restrict the application of the limited liability principle as regards liability for damages for personal injury or death caused by a company that is part of a corporate group...’. Following this call, in May 2008 the Corporations and Markets Advisory Committee released a report on long-tail liabilities, making various recommendations for reform. Separately, legislation was passed making pooling available for insolvent group companies in Australia. This paper examines the long-tail liability suggestions and the 2007 pooling amendments. It will be argued that neither of these is adequate for the proper protection of tort creditors of insolvent subsidiaries. It then considers international alternatives which might satisfy Mr Sheahan's appeal for reform.
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Bashan, Aviva, and Deganit Armon. "Quality management challenges in a dynamic reality of mergers, acquisitions and global expansion." International Journal of Quality & Reliability Management 36, no. 7 (August 5, 2019): 1192–211. http://dx.doi.org/10.1108/ijqrm-06-2018-0161.
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Purpose The purpose of this paper is to highlight the challenges facing the quality management system (QMS) of parent and subsidiary companies within the dynamics of multinational mergers, acquisitions and strategic partnerships, and to present guidelines for developing a global quality strategy. Design/methodology/approach The quality systems of 18 multinational companies at different stages of mergers and acquisitions (M&A) processes and different global expansion levels were studied in depth using observations, content analyses and interviews with CEOs and operational and quality managers in parent or subsidiary companies. Findings As part of the M&A process, not enough consideration is given to the functional aspects and challenges facing the QMS of subsidiaries, and to the integration of the subsidiary QMS into the corporate QMS. The findings highlight the strategic role of the parent company in creating a corporate QMS and developing a corresponding global quality strategy. Practical implications The classification of the challenges facing the parent and subsidiary QMS forms a diagnostic tool that supports a functional preparedness for integrating quality systems, while addressing their local needs, integrating them into the global activity of the system, and utilizing the growing integrative array of resources and capabilities to achieve global value. Originality/value While M&A is perceived as a strategic topic, it has direct impact on the QMS. This study outlines a necessary conjoining of quality management and strategy, which is the key to global quality management.
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Yilmaz Vastardis, Anil, and Rachel Chambers. "OVERCOMING THE CORPORATE VEIL CHALLENGE: COULD INVESTMENT LAW INSPIRE THE PROPOSED BUSINESS AND HUMAN RIGHTS TREATY?" International and Comparative Law Quarterly 67, no. 2 (December 20, 2017): 389–423. http://dx.doi.org/10.1017/s0020589317000471.
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AbstractThis article proposes a model of treaty-based veil piercing for civil liability claims by victims of human rights harm inflicted by businesses. The primary inspiration for this model comes from investment treaty provisions dealing with corporate investors. Our examination of investment law for this purpose exposes the double standard in the treatment of the corporate veil between these two remedy regimes, and offers a way to address this. The test we propose for lifting the veil in order to allow victims to claim against the parent company in a corporate group is one of ‘legal control’. It aims to capture cases where the parent did not necessarily take an active role in the subsidiary's business, but it is still treated as being in control of the subsidiary by virtue of its direct or indirect ownership or ability to appoint management.
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Manojj, M., and Mridula Sahay. "Productivity and stock price reaction to spin-off decision." Corporate Ownership and Control 13, no. 1 (2015): 292–95. http://dx.doi.org/10.22495/cocv13i1c2p7.
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In corporate governance, spinoff decision is made either to focus on a specific area of business or to get rid of businesses with low profit margin. Separation of some management assets for a better management of existing assets referred to as a spin off. The spun off or subsidiary company is formed by issuing new shares to the existing shareholders while losing some original or parent company shares. By doing so, shareholders’ value might be lost. With a sample of 65 companies spun off since 2009, this paper analyse the stock price movements of the spun off and the parent company and productivity in terms of turnover of the spun off company. From the analysis, there has been an increase in both productivity and stock price. This paper also emphasizes how corporate governance in spin off decisions can protect shareholders’ value.
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Jeon, Joon-Young. "The legal issues pertinent to Triangular Reorganization and subsidiary company's acquisition of parent company." Korea Financial Law Association 13, no. 3 (December 31, 2016): 309–47. http://dx.doi.org/10.15692/kjfl.13.3.10.
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Cai, Guilong, Yue Xu, Degan Yu, Junsheng Zhang, and Guojiang Zheng. "Strengthened board monitoring from parent company and stock price crash risk of subsidiary firms." Pacific-Basin Finance Journal 56 (September 2019): 352–68. http://dx.doi.org/10.1016/j.pacfin.2019.06.009.
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Augustine, Enofe,. "Determinant of Accounting Standard, Between Parent and Subsidiary Company Operating In the Globa Community." IOSR Journal of Business and Management 5, no. 5 (2012): 25–30. http://dx.doi.org/10.9790/487x-0552530.
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Ratkovic, Tatjana, and Ranko Orlic. "Transfer of performance appraisal practices from MNC parent to subsidiaries in Serbia." Ekonomski anali 60, no. 204 (2015): 105–26. http://dx.doi.org/10.2298/eka1504105r.
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This paper seeks to address one of central issues in the international human resource management literature regarding the extent to which foreign subsidiaries of multinational companies (MNCs) tend to implement performance appraisal practices and policies of the parent company versus those of local companies in the host country. The study conducted in 65 subsidiaries of foreign- owned multinational companies in Serbia found that performance appraisal practices in MNC subsidiaries in this transition country closely resemble parent company practices. The conclusion drawn from the study is that the transfer depends mainly on dependence on parent inputs, the degree of parental control, and subsidiary age, implying that MNCs need to take these variables into consideration when deciding whether to transfer their performance appraisal practices to their subsidiaries in this transition country or to accept local practices.
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Kutscher, Erika. "A spinoffs study applied to the airline industry." Journal of Transport Literature 8, no. 2 (April 2014): 134–77. http://dx.doi.org/10.1590/s2238-10312014000200007.
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Airlines have been recently debated the management of some of their non-core divisions, such as the Frequent Flyer Program (FFP). A spinoff is a form of corporate contraction that many companies have recently chosen. Through a spinoff, both the parent company and the divested subsidiary can each focus on their own activity, which translates into a better performance of both entities. This paper studies the circumstances in which a spinoff is a good strategy to pursue, along with some important issues that must be considered when reaching agreements. Spinoffs are basically a "downsizing" of the parent firm; therefore, the smaller firm must be economically more viable by itself than as a part of its parent company. The motivation for analyzing this particular topic comes from a question of current interest: Under what circumstances is it advantageous for an airline to spin off its Frequent Flyer Program, or other divisions that are not related with the airline's operation? In this paper, an extensive literature review introduces the reader to the different forms of corporate contraction and their performance under different circumstances. Three cases related to the airline industry follow: the spinoffs of TripAdvisor from the web agency Expedia, of Air Canada's FFP Aeroplan, and of American Airline's distribution system Sabre. These three cases illustrate some of the key issues that must be carefully considered when spinning off a subsidiary. The paper concludes that spinoffs are a smart strategy when the focus of the spun off division is different from that of the parent company. However, to safeguard future business relationships, the two entities must negotiate detailed agreements that are robust enough to perform successfully in all foreseeable circumstances.
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Lu, Wenling, and Wan-Jiun Paul Chiou. "Subsidiary ownership decisions by bank holding companies." Journal of Financial Economic Policy 12, no. 3 (November 16, 2019): 425–44. http://dx.doi.org/10.1108/jfep-05-2019-0088.
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Purpose This study aims to examine the intertemporal changes in the institutional ownership of publicly traded bank holding companies (BHCs) in the USA. The role of owned-subsidiary investing in the portfolio decisions is investigated as compared to unaffiliated banks and non-bank institutional investors. Design/methodology/approach The authors apply panel regressions that control bank-fixed and time-fixed effects to study the impact of prudence, liquidity, information advantages and historical returns on each type of the institutional ownership from 1986 to 2014. Findings The subsidiary banks tend to invest in more shares of their parent BHCs when they are traded for a short period of time and when they have low-market risk, low turnover, a low capital equity ratio and great reliance on off-balance activities. However, the impact of these determinants of institutional ownership is opposite for unaffiliated banks and non-bank institutions. Research limitations/implications This study provides evidence that the criteria used by subsidiary banks to invest in their parent company stock are different than the unaffiliated banks and non-bank institutions, raising concerns about the owned-subsidiary investing activities and banks’ trustees’ duty to work in the best interest of their trust clients. Originality/value This paper provides a comprehensive analysis of the level and market value of BHC institutional ownership over the past three decades and the impact of different determinants on the ownership of BHCs by subsidiary banks, unaffiliated banks and non-bank institutional investors.
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Van Ho, Tara. "Vedanta Resources Plc and Another v. Lungowe and Others." American Journal of International Law 114, no. 1 (January 2020): 110–16. http://dx.doi.org/10.1017/ajil.2019.77.
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In Vedanta v. Lungowe, the United Kingdom Supreme Court determined that civil claims for negligence brought by Zambian claimants against an English parent company (Vedanta) and its Zambian subsidiary (Konkola Copper Mines plc (KCM)) for damages experienced in Zambia can proceed in English courts. While framed as a domestic tort law case, the decision is significant for international efforts aimed at holding businesses accountable for their “negative impacts” on human rights. Writing for a unanimous Court, Lord Briggs's judgment hinged narrowly on the right of victims to access substantial justice. More broadly, Lord Briggs suggested that parent companies that hold themselves out in public disclosures as overseeing the human rights, environmental, social, or labor standards employed by their subsidiaries assume a duty of care to those harmed by the subsidiary. This suggestion has the potential to transform current corporate approaches to human rights due diligence and accountability.
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Sasanti Munir, Ningky. "Corporate parenting and corporate entrepreneurship in media company." International Journal of Financial, Accounting, and Management 3, no. 1 (June 4, 2021): 15–26. http://dx.doi.org/10.35912/ijfam.v3i1.425.
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Purpose; The study aimed to understand how the multi-business company creates value through a combined effort of Corporate Parenting (CP) and Corporate Entrepreneurship (CE). The parenting-fit matrix was used to describe CP, while CE four model was used to describe CE. Research methodology: This study is qualitative applied research using a case study approach conducted on a multi-business media company. Data was obtained primarily through interviews with senior executives representing the holding company and 18 subsidiaries. Questionnaires were also distributed to executives to develop a parenting-fit matrix and CE model. Results: This study shows that the 18 subsidiaries of the multi-business company fall under four different cells. The CE model applied at the parent company level is the enabler. Limitations: The limitation of this study mainly lies in the measurement method's reliability for corporate parenting and corporate entrepreneurship. Contribution: This study shows that, apart from the parent company, the development of new businesses can also be carried out by the subsidiary companies using the CE producer model.
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Wen, Junshan, and Rui Yang. "The Research of the Transferring Knowledge between the Parent and Subsidiary Company (Based on Taiwan)." Open Journal of Business and Management 02, no. 02 (2014): 151–61. http://dx.doi.org/10.4236/ojbm.2014.22018.
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Trivun, Veljko. "Groups of Companies and Liability within the Group." Journal of Forensic Accounting Profession 1, no. 1 (June 1, 2021): 61–81. http://dx.doi.org/10.2478/jfap-2021-0005.
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Abstract Groups of companies have existed ever since the early 20th century in the legal and economic terms. Over time, their concept was complemented, both in legislation and in the corporate practice. The issue of establishing and managing groups of companies is regulated by the corporate legislation. It particularly regulates the concept of the controlling and subsidiary company, company with mutual shares, holding, concern, association of companies and other forms of company associations. In terms of the legal definition, these are associated companies composed of two or more companies that are affiliated to each other as follows: by share in equity or membership interests (equity-related companies), by contract (contract-related companies); by equity and contract (mixed-related companies). These associated companies include a parent company and one or more subsidiary companies, which may be related by equity, contract or both. Besides the general concept of the associated companies, the author aims to point to the liability in a common activity as a group of companies. A particular attention is drawn to the legal treatment and obligations resulting from the International Accounting Standards and binding financial statements related to them.
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Siudak, Dariusz. "The Influence of Interlocking Directorates on the Propensity of Dividend Payout to the Parent Company." Complexity 2020 (May 27, 2020): 1–16. http://dx.doi.org/10.1155/2020/6262519.
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An examination was performed on whether director interlocks enabled the adoption of a dividend policy for the benefit of the parent company in the ownership structure. Specifically, the study investigated the dependence of the impact of the central position in the board network on the probability of dividend payment. Based on sample of firms listed on Polish capital market, it was observed that the more central the company’s position in the interlocking directorate network, the more likely it is to pay dividends to a subsidiary. This effect is related to the eigenvector centrality. The results obtained suggest that corporate financial policy can be spread across firms through the board network.
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Xu, Peng, Heng Zhang, and Guiyu Bai. "Research on the Differentiated Impact Mechanism of Parent Company Shareholding and Managerial Ownership on Subsidiary Responsive Innovation: Empirical Analysis Based on ‘Principal–Agent’ Framework." Sustainability 11, no. 19 (September 25, 2019): 5252. http://dx.doi.org/10.3390/su11195252.
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Under the dynamic competition situation, the innovation competition interaction between enterprises will take the form of mutual responding, while the formulation and implementation of responsive innovation strategy will be influenced by both shareholders and managers in the principal–agent relationship. In our research, we try to understand how the difference of governance logic between shareholders and managers affects innovation interaction strategy of enterprises. In order to achieve this research goal, this study takes all eligible listed companies (from 2007 to 2016) in China’s stock market as samples. The results show that the parent company shareholding has a negative impact on the subsidiary responsive innovation, while companies whose managers hold more shares select the relatively positive strategy responsive innovation. Moreover, the degree of separation between ownership and control rights and the external institutional environment can moderate the above relationship. Relevant conclusions can provide some reference value for the formulation of responsive innovation decision of listed companies and provide new insights for the design of parent–subsidiary corporate governance structure and the design of managerial equity incentive mechanism in the context of corporate group governance.
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Yacob, Shakila. "Ford's Investment in Colonial Malaya, 1926–1957." Business History Review 83, no. 4 (2009): 789–812. http://dx.doi.org/10.1017/s000768050000091x.
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The corporate history of Ford in Malaya from 1926 to 1957 reveals Ford Canada's global strategy to tap new British colonial markets. A combination of factors motivated Ford Canada to set up a subsidiary in Malaya, whose subsequent domestic sales and marketing success depended on maintaining mutually beneficial relations with the local merchant firms and Chinese entrepreneurs. After it was directed by the parent company to restructure its operations, Ford Canada imposed tight control on its own local operations to ensure that it could meet evolving consumer demands in Malaya and across the wider region. However, the company was careful to maintain its ties with these marketing and networking channels.
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Zhu, Ying, and QiQi Xu. "Review and Prospect of the Research on Overseas R&D Investment of MNEs and Subsidiary Performance." International Journal of Business and Management 16, no. 3 (February 5, 2021): 36. http://dx.doi.org/10.5539/ijbm.v16n3p36.
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In recent years, as globalized R&D activities have been launched on a large scale, more and more scholars have started to study overseas investment activities, but most of the research perspectives only focus on overseas investment entry methods, investment motives, and less on the study of reverse technology spillover of overseas R&D investment and the relationship with parent company innovation performance. Unlike overseas investment, overseas R&D investment is based on the knowledge base view, which considers knowledge as an important resource for enterprises, and tacit knowledge that is not easily understood and difficult to be expressed plays a key role in creating competitive advantage for enterprises. The dissemination of tacit knowledge is based on face-to-face interactions between individuals or organizations, and overseas R&D allows R&D activities to be geographically close to overseas markets and host country environments, thus enabling the transfer of home country knowledge and the acquisition of local knowledge. This study focuses on the motivation of overseas R&D investment, reverse technology spillover and relationship with parent company performance, and discusses future research directions.
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Chugunova, Kseniya Yur'evna. "Peculiarities of property management of subsidiary companies established by the joint-stock companies with state participation (on the example of “Russian Railways” JSC)." Юридические исследования, no. 8 (August 2020): 51–61. http://dx.doi.org/10.25136/2409-7136.2020.8.33847.
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The relevance of this topic is substantiated by the insufficient coverage within scientific literature of the questions of legal regime of property of subsidiary companies with state participation in share capital, and management of state property transferred to such economic entities. The majority of research on the topic of property management of legal entities with state participation is structured through the prism of the efficiency of usage of state property, leaving outside the scope property sphere of subsidiary companies, which is also of considerable interest. The object of this article is the process of property management in the joint-stock companies with state participation, while the subject is the relations between the state-owned joint-stock company and its subsidiaries in the property sphere. Special attention is given to the practice of “Russian Railways” JSC (100% of which belongs to the Russian Federation) that is one of the largest private owners of real estate in Russia , and consolidates significant volume of money, shares and other movable property, which makes “Russian Railways” JSC and its subsidiary companies a fruitful ground for studying the topic at hand. The article underlines the need for identification of boundaries of the corporate and economic control of the parent company over its subsidiary, the absence of which in the current legislation can lead to a relative property autonomy of the subsidiaries of large joint-stock companies with state participation. Therefore, the author proposes mechanisms for improvement of legislation.
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Damayanti, Herwinda Rena, Alifah Sarah Yunita, and Mega Lois Aprilia. "Arbitration Agreement to Non-Signatory Parties in Indonesia." Notaire 2, no. 2 (August 8, 2019): 173. http://dx.doi.org/10.20473/ntr.v2i2.14494.
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AbstractInternational business transaction, especially in the exchange of goods and services nowadays, a contract is normally concluded to govern the entire relation between the parties. Ideally, the perfect contract probably should be able to give foresights to all possible scenarios and their solutions, regarding the beginning of the business relationship, its performance and finally its termination. In today’s commercial transaction, the parties will draw up an arbitration agreement in their contract to submit all disputes arising from a contract to a neutral body. The presence of non-signatories party in arbitration agreement is apparent on a contract which involves an affiliated companies. This situation arises because it is becoming more acceptable nowadays for a company to establish subsidiary companies in order to make business transaction become more swift and sophisticated. The liability issue normally happened when there are two company that are affiliated to each other while only one of them signed the contract. On this ground, there have been some cases wherein the affiliation is considered as an equal liability between the parent company and subsidiary, especially when the parent company is also involved in the contract performance. Extending the scope of an arbitration agreement to a party who is initially not signed under the agreement would defeat the original purpose of having the agreement in the first place. It must be remembered that the starting point of arbitration agreement is its privity, that is, it will only bind the parties who signed it From this perspective, a question arises on whether according to the regulations in Indonesia, an action of a company who has knowingly engage themselves in a contract concluded by their affiliates will make them bound to the contract and the arbitration agreement as well. This research is to give a better understanding on to what extent does a company, who only acts as a non-signatory, can be bound to an arbitration agreement if a dispute arises by seeing it from the Indonesian law perspective.
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Hughes-Jennett, Julianne. "Vedanta Resources PLC and Another (Appellants) v. Lungowe and Others (U.K. Sup. Ct.)." International Legal Materials 58, no. 5 (October 2019): 1114–38. http://dx.doi.org/10.1017/ilm.2019.44.
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On April 10, 2019, the U.K. Supreme Court (UKSC) handed down judgment in the case of Vedanta Resources PLC and Another (Appellants) v. Lungowe and Others (Respondents). The case raises important issues regarding jurisdiction and the potential for a duty of care to be imposed on a parent company in respect of harm caused by its subsidiary. The UKSC has also made clear that a duty of care could be imposed in a nonequity relationship such as in relation to a company's supply chain.
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Siti-Nabiha, A. K. "Performance Management System at Gas Company." Asian Case Research Journal 14, no. 01 (June 2010): 95–115. http://dx.doi.org/10.1142/s0218927510001325.
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The case is about the implementation of a performance management system (PMS) in ALPHA, a gas processing company. ALPHA is also a subsidiary of a multinational company based in Malaysia. The new performance management system was imposed on ALPHA by its parent company. The PMS integrates the following key management processes, i.e. strategic planning, portfolio management, resource allocation, performance measurement and reporting and executive compensation in the organization. The ultimate aim of the new system is to ensure that the focus of business activities is on economic value creation. At the heart of this system is the use of key performance indicators (KPIs) for each of the management processes coupled with performance targets for all the KPIs. However, there were various implementation problems in the company. The employees had difficulty in formulating their performance indicators. There was also confusion and anxiety among the organizational members regarding the new system, specifically on how it would impact on their performance appraisal. Consequently, most of the employees formulated two sets of indicators, one to be used for their performance appraisal and another indicator for the performance management system, which is not used in their evaluation system. Ms. Marinah, the General Manager of the Finance Division and also the person responsible for the implementation of the new performance management system needs to make a decision as to whether to continue the usage of two sets of indicators for the parent company or to brief the managers again about the usage of value based indicators for their appraisal system.
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Cinquini, Lino, Falconer Mitchell, Hanne Nørreklit, and Andrea Tenucci. "Methodologies for using performance measurement." Proceedings of Pragmatic Constructivism 1, no. 1 (March 1, 2011): 12–18. http://dx.doi.org/10.7146/propracon.v1i1.15869.
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The speech explores the operational dynamics of a PMS at the interface between a parent company and its subsidiary. The research is based on two case studies. The companies are both subsidiaries of US multinational companies located in Italy. Both are market leaders of different sectors and governed by different strategic mentalities and managerial methodologies that reflect the specific business strategy adopted by the parent company. The methodologies of performance management in use by the two companies are addressed respectively as pragmatic constructivism and pre- categorized analytical data paradigm.Drawing on the narrative of the two cases we conclude that these two methodologies of performance management use support two alternative views of strategy: competitive advantage and resource-based view. The findings show that it is not simply the structure or technical design of a PMS that will determine its impact on an organization and ultimately its practical success but also the strategic mentality that underpins its functional rationale.
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GODLEY, ANDREW, MARRISA JOSEPH, and DAVID LESLIE-HUGHES. "Technology Transfer in the Interwar U.S. Pharmaceutical Sector: The Case of E. Merck of Darmstadt and Merck & Co., Rahway, New Jersey." Enterprise & Society 20, no. 3 (June 7, 2019): 613–51. http://dx.doi.org/10.1017/eso.2018.97.
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This is a case study of the U.S. pharmaceutical producer, Merck & Co. By 1940 this was one of the leading pharmaceutical producers in the United States, and the company went on to become one of the global industry leaders after World War II. It was founded in 1891 as the U.S. subsidiary of a much larger German pharmaceutical company, E. Merck of Darmstadt. The existing understanding of Merck & Co.’s history emphasizes how it was reacquired by the American branch of the Merck family after wartime sequestration, and from then onward it pursued a path of development separate from its former parent. This article revisits that history of the company and shows how the two Mercks began to cooperate and share technology and manufacturing know-how during the 1930s, something that was particularly to the advantage of Merck & Co.