Corporate Parenting Styles of the Multinational Corporation: A Subsidiary View

Abstract

Abstract Purpose The aim of the chapter is to evaluate the concept of corporate parenting styles, identify missing elements in the theoretical constructs, and develop new theoretical constructs. Methodology/approach The chapter provides a summary of the existing literature on corporate parenting styles and uncovers the missing elements in the theoretical constructs. New theoretical constructs fill the gaps. Findings The chapter presents a new typology of corporate parenting style by combining corporate parents’ processes of adding value to and extracting value from subsidiaries. The five-type typology of corporate styles outlines the different levels of value addition and value extraction and various degrees of reciprocity in both processes. This chapter determines the most important factors that affect the selection of corporate parenting style. It postulates that the multinational corporation should exhibit different parenting styles toward its subsidiaries simultaneously and should be ready to amend its parenting styles to reflect changes in a subsidiary’s strategy and its motives for corporate ownership. Research limitations/implications A new agenda for empirical studies oriented toward variability of parenting styles is proposed. Empirical tests of our propositions are needed. I encourage researchers to extend our research by considering the regional (supra-national), industry, and individual levels of analyses. Originality/value The chapter provides a more realistic view of corporate parenting styles than that found in the previous literature and outlines promising directions for further theoretical and empirical research.