The Role of Resource Sharing, Corporate Control Strategy, and Human Resource Management Control System: An Empirical Study for Subsidiaries of Conglomerates in Taiwan

• Main Authors: Yao-Sheng Liao, 廖曜生
• Other Authors: Ming-Tien Tsai
• Format: Others
• Language: en_US
• Online Access: http://ndltd.ncl.edu.tw/handle/6v56f9

博士 === 國立成功大學 === 企業管理學系碩博士班 === 90 === Abstract The relationship between diversification strategy and performance outcomes is complex. The variance in overall performance should be traced to business-level. In Taiwan, the implementation of diversification strategy leads to the formation of conglomerates. The measure of performance should be traced to each subsidiary instead of overall performance. Human resource management is one of the principal mechanisms by which managers integrate the actions of individuals to keep them conformant with the interests of the firm. Thus, HRM control system has great effect on firm performance, its mismanagement can lead to confusion and inefficiency. A competitive advantage can be created through the unique bundle of several resources. Thus, resources play an important role when a firm diversifies. The more related a firm is, the more a firm is dependent on the resource sharing to create value. Due to the fact that characteristics of each resource type vary, the effect of resource sharing on the implementation of diversification is different. Thus, the corporate control strategy should be tailored to the situations of individual business unit. Hypotheses are proposed after reviewing related literature and interviewing seven companies from three conglomerates. Empirical results from 79 firms indicate that resource sharing is high for related subsidiaries. When sharing of physical, intangible, or executive resource is high, the parent company tends to emphasize the imposition of strategic control. A subsidiary characterized by high physical resource sharing accompanied with high imposition of financial control might deter the use of behavior, output and input control. Output control is emphasized when imposition of strategic control is high with high sharing of physical or executive resource, or imposition of financial control is high with low financial resource sharing. Under the conditions of high imposition of strategic control, an emphasis on behavior control will improve the subsidiary’s performance. To improve a subsidiary’s performance, high physical resource sharing may accompany with high imposition of strategic control instead of financial control. When financial resource sharing is low, strategic control should be used for the imposition of corporate control strategy.