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Control and Coordination of Chinese Subsidiaries in France

  • Johannes Schaaper
  • Ni Gao
Chapter

Abstract

France is nowadays an attractive country for Chinese investors. With their direct investments in France, Chinese companies pursue mainly market and asset seeking goals. However, Chinese often lack international experience, which makes performance of their subsidiaries in France difficult to achieve. Our research tries to understand how Chinese companies use coordination and control mechanisms to manage their subsidiaries. We held interviews with 17 managers in charge of Chinese subsidiaries in France. We find that Chinese companies use four main dimensions of coordination and control to manage their subsidiaries in France: (i) control through the share of capital in a subsidiary, with a clear preference for wholly-owned subsidiaries or large majority shares in joint ventures; (ii) decentralised decision-making to compensate for the lack of international experience of Chinese managers; (iii) formalisation of the subsidiary’s organisation through a mix of reporting, ERP and written documents; and (iv) control by international human resources coming from the Chinese headquarters, including expatriates with rather observational roles and frequent short-term assignments.

Keywords

Chinese foreign direct investment France Qualitative research Management of subsidiaries Control and coordination 

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Johannes Schaaper
    • 1
  • Ni Gao
    • 2
  1. 1.IAEUniversity of BordeauxBordeauxFrance
  2. 2.Kedge Business SchoolBordeauxFrance

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