An evaluation of the impact of multinational company control systems on performance of its subsidiaries: A case study of AON Zimbabwe

Abstract

The aim of this study was to attempt to fill the research gap by studying the impact of the multinational control systems on the performance of a Zimbabwean organization. The general conclusion from literature on multinational control systems on their subsidiaries results in increased profits, increased revenue, increased market share and good corporate governance. Nevertheless, the literature has been based on the researches specifically done in different countries around the globe. The research was based on a single case study of Aon Zimbabwe. The research findings and their applications were aimed at benefiting the academic community, the corporate world and our Zimbabwean nation. The empirical data was obtained through face to face interviews with senior management of Aon Zimbabwe at strategic and operational levels of the organization. The respondents were three General Managers, Human Resources Manager, Finance Director and IT Manager. The structured interview questions were used to collect data from the respondents. Qualitative research methodology was used to carry out the study and the data collected was analyzed through the use of Data Displays in the form of content analytical summary tables. The study found that multinational control systems had a partial impact on the organizational performance of Aon Zimbabwe. The control systems by Aon Corporation on Aon Zimbabwe were successful on the other hand as it maintained the integrity of the company, supported the achievement of the organization’s objectives and protected stakeholder value. On another spectrum, the multinational control systems had a negative impact on the revenue and profitability and were expensive on the subsidiary’s funding in terms of training and development costs. The control systems were not a full success, as the control systems were not fully adaptable in the Zimbabwean operating environment, lack of managerial support, differences in culture between the headquarters and the subsidiary and the centralization of the decision making by Aon Corporation.In view of these findings this study recommends that Aon Corporation should use market approach, local customization and knowledge management.