The Determinants of Multiple Forms of Controls in Foreign Subsidiary Manager Evaluations

This study explores how the determinants of financial, nonfinancial and behavioural controls vary in foreign subsidiary manager performance evaluations. Possible impacts of the following factors are analyzed: extent of geographical dispersion, decentralization and perceived environmental changes. Hypotheses are tested, using principal component and multiple regression analysis, with data collected from annual reports and from 103 top managers from a wide range of Finnish business unit headquarters. The results suggest that, in MNCs, top management's emphasis on financial controls tends to remain very high, regardless of the contingencies analyzed. However, the data support several regularities between the factors examined and nonfinancial controls in particular and behavioural controls to a smaller extent. This, in turn, leads to variations in the relative emphasis on financial controls