A parent company typically exercises control over its subsidiaries through various means, both legal and operational, to ensure alignment with its strategic objectives and to maximize value for shareholders. One primary method of control is through ownership of a majority stake in the subsidiary's shares, granting the parent company voting rights and the ability to appoint the subsidiary's board of directors. This gives the parent company significant influence over key decision-making processes within the subsidiary.

Furthermore, the parent company may establish policies, procedures, and guidelines that subsidiaries are required to follow. These can cover areas such as financial reporting, operational practices, corporate governance, and risk management. By setting these standards, the parent company maintains consistency and ensures that subsidiaries operate in accordance with its overall vision and values.

Additionally, the parent company may provide financial support to its subsidiaries through capital investments, loans, or guarantees, which can influence decision-making and ensure that subsidiaries have the resources needed to execute strategic initiatives.

Moreover, the parent company often engages in regular communication and oversight with its subsidiaries, monitoring their performance, providing guidance, and fostering collaboration among different parts of the organization. This helps to maintain cohesion and alignment across the entire corporate structure.

Overall, the combination of ownership control, governance mechanisms, financial support, and communication channels enables the parent company to effectively exercise control over its subsidiaries while allowing them the autonomy to operate within their specific markets and industries.