A New Chapter of Subsidiary Charters in MNEs: Will Alignment Become More Effective through the Dynamics of Subsidiary Role Change and their Performance

Abstract

The drivers of subsidiary development continue to advance following changes in the global environment. As an evolutionary mechanism, alignment assists MNEs in capturing value while ensuring that subsidiaries can deliver their commitments. Here, we focus on whether the subsidiary role change specified in charters is linked to performance by specifically using the perspectives of scorecard and retention. Our study is garnered from statistical analyses of 152 responses to surveys given to Taiwan MNE subsidiaries. We discuss our findings in the context of HQ-subsidiary relationships and consider the managerial implications for initiating a new chapter of subsidiary management.