Further insights into assessing performance in the subsidiaries of MNEs

Abstract

International business literature often associates company performance with a wide range of phenomena. However, MNE subsidiary performance is to a certain extent idiosyncratic, often too specific to conform to generalised observations. A consensus on the exact nature of subsidiary performance has yet to be achieved, although various approaches to assessment have been suggested. This contribution examines subjective MNE subsidiary performance measurement as a particular indicator of overall subsidiary performance. Using a sample of 249 MNE subsidiaries, it compares subjective and objective performance measures and explores the specifics of the subjective subsidiary performance evaluation. The results indicate that subjective and objective performance measures might not correlate in MNE subsidiaries, although such a correlation is often anticipated. Furthermore, it reveals the main obstacles to subjective performance assessment in subsidiaries. A summary of matters that should be taken into consideration when evaluating subsidiary performance is provided and promising directions for future research are suggested.