when a company hires its own staff to manage the subsidiary forming common operating procedures is generally less complicated than leaving the established leadership in place 
a parent company that acquires a subsidiary overseas or in an industry that s new to it might take a less heavy handed approach leaving current management in place the parent company is likely to apply its own data access and security directives for the subsidiary to lessen the risk of losing intellectual property to other companies using compatible financial systems sharing administrative services and creating similar marketing programs help reduce costs for both companies a parent company also directs how its wholly owned subsidiary s assets are invested acquiring a wholly owned subsidiary may force the parent company to pay a high price for the subsidiary s assets especially if other companies are bidding on the same business there can be a difficult transition period as well establishing relationships with vendors and local clients takes time which may hinder the operations of both companies cultural differences can become an issue when hiring staff for an overseas subsidiary finally the parent company assumes all the risk of owning a subsidiary that risk may increase when local laws differ significantly from the laws in the parent company s country there are tax advantages for wholly owned subsidiaries that may be lost if the parent company simply absorbs the assets of an acquired company 