Effective coordination between subsidiary and headquarter operations is essential for a global firm to accomplish an optimal performance for its global operations as a whole. Although much research has been focused on the issue of global coordination, many researchers seem to view it only from a narrow perspective so that there has been a lack of comprehensive investigation into the fundamental elements of an effective coordination mechanism. In this thesis, we define a coordination mechanism as an integral system consisting of coordination dimension, coordination structure, and coordination method: coordination dimension is concerned with a firm's decision horizon, structure represents a pattern of decision right allocation, and finally, method relates to specific ways/tools to communicate. Based on the analysis of data collected from 42 Korean firms and their foreign subsidiaries, we have found that the effectiveness of a coordination mechanism on global operations be determined by dynamic interplay among three fundamental elements (i.e., coordination dimension, structure, and method) along with firm and industry characteristics.
