Empirical Analysis of Interactive Control's Effectiveness: A Parent-Subsidiary Company's Interdependence Perspective

Provided by: Scientific Publishing Ltd. Topic: Social Enterprise Format: PDF
Due to the increasingly complex business environment and the principal-agent relationship, the enterprise group should establish a control system to prevent agency risk. Besides traditional system control, the parent company tends to adopt an interactive control including decentralized decision making, process communication and target incentive to guide and govern the subsidiaries. As an elastic control mechanism, the interactive control's effectiveness could be influenced by the resources dependence relationship which is objective existence between the parent and subsidiary company.

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