Control and its perception in CEE parent companies and their developed market subsidiaries

Abstract

Our article examines control perceptions among Central and Eastern European (CEE) parent companies and their subsidiaries in developed markets based on human resource management and corporate social responsibility practices. Through a multiple case study approach, we identify the usage of impersonal and personal control mechanisms across three parent companies from the Czech Republic and their subsidiaries in Germany. We also identify perception gaps regarding the intensity of the asserted parental control of subsidiary practices. Due to isomorphic pressures, parental interference in practices with a high contextuality in the developed host market result in the perception of being tightly controlled in the subsidiary, which is in contrast to the parent’s perception. Nevertheless, we demonstrate that close personal ties between parent and subsidiary managers alleviate the control perception on the subsidiary side and consequently the overall control perception gap.