The Theoretical Framework of the Selection on Parent-Subsidiary Control Mechanism

The control of parent company has been the indispensable and most effective tool for the healthily development of the enterprise. Parent- subsidiary has developed rapidly, but the issue of control always exists, and its effectiveness can´t satisfy expectation. Combining with these influencing factors: external environment uncertainty, parent strategy and subsidiary´s strategy role, this paper reviews the literature about control mechanism, builds a theoretical framework about the selection of parent-subsidiary control mechanism, and extends the relationship between the control mechanism and performance based on this framework.