Katharina Kretschmer’s research while affiliated with International School of Management and other places

During recent years, the literature on the international dimension of business has grown. In particular, the literature on headquarters–subsidiary relationships has expanded. This paper aims to review the literature on performance evaluation and elaborate an integrative contingency framework. This contingency framework helps to clarify the concept of performance evaluation and to classify existing contributions. Furthermore, the framework serves as a tool to identify potential influencing factors on performance evaluation at corporate and at subsidiary level. By reviewing existing studies, the paper analyses the impact of these influencing factors on performance evaluation and reveals mostly contradictory results or no significant impact at all. Based on the findings, more research outside the classical tradition of contingency approaches is suggested.

Today, Multinational Corporations (MNCs) spread their value chains across the globe and foreign subsidiaries play a crucial role in creating value within and for the MNC. While some MNCs are aware of their subsidiaries performance, others only have a vague idea. Research findings in this area are scarce and it is still little known on how different subsidiaries should be evaluated in order to maximize their contribution to the performance of the MNC as a whole. Katharina Kretschmer aims at filling this research gap. Qualitative case studies are used to analyze performance evaluation within MNCs empirically. The author shows that role differentiation exists within one MNC when subsidiaries with different strategic roles are identified. Furthermore, patterns are discovered in their performance evaluation. Deep insights into the implications of subsidiary roles are displayed, and it is demonstrated that role-specific subsidiary management is possible, if not necessary. In the future, MNC managers could benefit even more if, instead of treating all their subsidiaries alike, they approached them differently-especially when evaluating their performance.