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Determinants of Controlling in Foreign Subsidiaries of MNEs: On the Explanatory Potential of the Institutional Perspective



Objective: The main aim of this paper is to identify gaps in extant literature on controlling in MNEs, in particular factors affecting related managerial decisions. Secondly, the relevance of the institutional perspective will be examined for its potential to explain the design of controlling in foreign subsidiaries.

Research Design & Methods: The dimensions of international controlling are discussed. Further, the institutional approach is examined for its applicability to advance the understanding of the determinants of shaping controlling systems in foreign subsidiaries of MNEs.

Findings: Institutional aspects can have a significant impact on the functioning of MNEs in relation to their controlling systems. Informal institutions can influence the formation of the controlling system in the relations between the subsidiaries of the MNE, whereby also institutions within the MNE itself should be taken into account.

Implications & Recommendations: Conducting in-depth qualitative research will allow for a set of recommendations that are relevant to managers responsible for an effective implementation of management control systems.

Contribution & Value Added: The relevance of the controlling system in parent-subsidiary relationships has not received significant attention in existing studies in the discipline of international controlling.



Multinational enterprises (MNEs), controlling system, headquarters-subsidiary relationship, coordination, firm performance


Author Biography

Cezary Kochalski

Cezary Kochalski, PhD and post-doctoral degree in economic sciences is associate professor at the Poznań„ University of Economics and Business, Department of Controlling, Financial Analysis and Valuation. Graduate of the PoznaÅ„ University of Economics and Business, he also completed his postgraduate studies at the University of Stirling (UK) in accounting and finance. He has been a member of the Examination Commission for candidates for Certified Public Accountants since 2013. He acquired his experience in business inter alia as a financial analyst at the Wielkopolski Bank Kredytowy, advisor to the President of the Polish National Bank, vice-rector responsible for strategy and development at the PoznaÅ„ University of Economics, and advisor to the Mayor of PoznaÅ„, responsible for strategy. He is the author of over 100 publications on economic analysis, financial analysis, controlling, strategic management, management accounting and value management.

Magdalena Łuczak-Trąpczyńska

M.Sc. in Management of the Poznań University of Economics and Business. Her doctoral research concentrates on the institutional determinants of the controlling system in MNE subsidiaries. She is chief financial officer in a subsidiary of an MNE operating in Poland, and served as board member in the same company. Overall she has extensive experience in controlling positions in both headquarters and subsidiaries of MNEs.


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