Table 4 Supervision and management of subsidiaries factor (criterion) assessment architecture

A

Directors and supervisors of subsidiaries (\(a_{1}\))

The power of the parent company to appoint and remove directors and supervisors of the subsidiaries

Situmoranga and Japutra (2019), Cai et al. (2018)

Department division of responsibilities in subsidiaries (\(a_{2}\))

Clarity of the division of authority and responsibility between departments in subsidiary companies

Boussebaa (2015)

B

Management of subsidiary operating efficiency (\(b_{1}\))

The extent to which subsidiaries completes the expected performance indicators (e.g. sales, profits, inventory, etc.) of the parent company

Zhai et al. (2020)

Implementation of the subsidiaries' annual business plan (\(b_{2}\))

Subsidiaries complete the business objectives and business plans issued by the parent company during each year

Matolcsy and Wakefield (2017)

C

Management of budget and final accounts (\(c_{1}\))

Annual budget and final accounts management issued by the parent company to subsidiaries

Dunk 2001, Defranco and Schmidgall (2017)

Payment management (\(c_{2}\))

Management of accounts receivable, payable, etc

Sonia et al. (2014)

Purchasing and supply management (\(c_{3}\))

Management of the organization, implementation and control of the procurement process of subsidiaries

Weele and Raaij (2014), Johnsen (2018)

D

Operations management (\(d_{1}\))

To plan, organize, implement and control the business process of the enterprise, the essence of which is to manage financial accounting, technology, production and operation, marketing and human resources management in an integrated manner

Bromiley and Rau (2015)

Investment management (\(d_{2}\))

Parent company's management of the quality (return on assets) and efficiency (payback period) in subsidiaries’ investments

Hsu and Liu (2018)

Capital Management (\(d_{3}\))

Capital management mainly includes centralized management of fund budget, cash, settlement and financing

Mortensen (2014)

E

Financial and business communication system (\(e_{1}\))

Based on the communication of business and financial information, parent company adopts control means to accurately grasp the actual operating conditions of subsidiaries and push subsidiaries to achieve organizational goals

Poston and Grabski (2015)

Provision of management reports (\(e_{2}\))

Subsidiaries provides the parent company with various internal management reports(including fund analysis reports, operating financial activities reports, asset use reports, investment benefit analysis reports, internal audit reports, etc..)

Chang and Taylor (1999)

F

Construction of internal control system in subsidiaries (\(f_{1}\))

Risk management control, operational level control, major investment project control, internal audit system, reporting and disclosure control, financial statement management, etc.

Aziz et al. (2017)

Implementation of the annual internal audit plan (\(f_{2}\))

The parent company issues the subsidiaries’ internal audit plan each year according to the operating characteristics and business scale of each subsidiary, and assigning the corresponding auditor to evaluate the implementation of subsidiaries’ internal audit plan

Chen et al. (2015), Hu et al. (2018a, b)

Project audits of subsidiaries (\(f_{3}\))

Special audit of major business projects and investment activities of subsidiaries to judge the feasibility of investment projects and the efficiency of capital use

Weng and Cheng (2019)

Rectification of internal audit issues (\(f_{4}\))

The audit department classifies the operational problems found in each audit, using the information exchange and feedback mechanism in parent-subsidiary companies, reasonably determining the risk level, and formulating a detailed rectification plan (clear rectification requirements, time limit, responsible person, result), follows up and evaluates the internal rectification situation

Ke (2018)