Major determinants affecting the autonomy of multi national corporation subsidiaries in China

Abstract

In recent years, studies of multi-national corporations (MNC) have shifted their focus from the perspective of the MNC itself to the perspective of transnational networks, which has resulted in greater recognition of the role and function of MNC subsidiaries. China’s membership of World Trade Organization has offered more opportunities for MNC in China with the consequence that many of their subsidiaries have become international players where subsidiary autonomy is considered an essential competency. World famous MNCs set up subsidiaries in succession to occupy a market share in China. Therefore, it is worthy to study MNCs' Chinese subsidiaries’ behaviour. This quantitative study therefore examined the role and autonomy of MNC subsidiaries in China and their relationship with their parent corporations. This quantitative study analysed the way in which the literature on subsidiary autonomy has evolved and identified determinates of such autonomy. The findings revealed that there are correlations between MNC procedure justice, subsidiary integration, subsidiary local responsiveness, and subsidiary relative capability and their influence on subsidiary autonomy. This suggests that the role of a subsidiary is highly influenced by its position in the MNC network.