Emerging Market Multinational Family Business Groups and the Use of Family Managers in Foreign Subsidiaries

Allocation of Decision Rights and CSR Disclosure: Evidence from Listed Business Groups in China

Corporate social responsibility (CSR) research has recently begun to focus on the CSR performance of business groups, with the scope shifting from group members to business groups in general. This paper focuses on whether business groups with centralized decision rights tend to disclose more CSR information and investigates the heterogeneous effect of the number of subsidiaries. Using a dataset for listed groups in China from 2010 to 2020, our empirical test discovered that centralized decision rights could promote group CSR disclosure. For groups with many subsidiaries, centralization makes a more significant contribution to promoting CSR disclosure. The mechanism test revealed that this positive relationship between centralization and disclosure relies on efficient internal capital market allocation, a reduction in rent-seeking behavior of subsidiaries, and reputational concerns. Furthermore, we observed that the centralized decision rights influence on disclosure varies across different aspects of CSR, with a negative impact on “Social Contribution” and a positive impact on “Shareholder Responsibility”, “Employee Responsibility”, “Supplier, Customer, and Consumer Responsibility” and “Environmental Responsibility”. Centralized decision rights promote more CSR disclosures with voluntary disclosures, while regulatory disclosures have no significant effect. We research the allocation of decision rights and group CSR disclosure.

Digitalization and corporate parenting styles of multinational corporations

Purpose

This paper aims to outline the current and future influence of digitalization on the corporate parenting styles (CPSs) of multinational corporations (MNCs).

Design/methodology/approach

The authors used conceptual modeling in this study.

Findings

The authors identified five types of CPSs (Hypnos, Cronus, Rhea, Zeus and Athena). The overall impact of digitalization on CPSs is related to new, formidable opportunities for decreasing costs and increasing the efficiency of the intra-corporate transfer of knowledge and talent. Furthermore, digitalization leads to greater tightness in subsidiaries’ performance targets and greater intensity of control over subsidiaries’ activities, lower degrees of subsidiary autonomy and lower level of trust between the corporate headquarters and subsidiary managers. These effects endanger the existence of two CPSs (Hypnos and Athena) and significant changes for the other three CPSs.

Practical implications

Digitalization may lead to more homogeneous corporations, with the lower variety of CPSs and the greater centralization of decision-making in corporate and regional headquarters and stronger control on operations and performance of subsidiaries. Increased opportunities of a horizontal value transfer (knowledge) within the corporation will present an additional competitive advantage of subsidiaries of MNCs. The increased ability and willingness of corporate and regional headquarters of value appropriation from subsidiaries in different forms (profit, revenues, knowledge and talent) will force subsidiaries to use that additional competitive advantage to become more aggressive competitors in local and global markets.

Originality/value

To the best of the authors’ knowledge, this is the first attempt in the academic literature to predict the mutation of CPSs of MNCs under the impact of digitalization.