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The purpose of this study is to find factors that afect decent ralization between the corporate headquarter and subsidiary. This study suggests that the factor affecting decentralization is not the competitive strategy (subsidiary’s ‘need’ for decenrtal ization) but the resource (the ‘bargaining power’ for decentralization). Based on the resource dependence perspective, this study analyzes the effect of subsidiary resource flexibility, a s wel as resource level on decentralization. Also, as a part of studies of decentralizatio n in diversified firms, this study classified decentralization between headquarters and subsidiari es into two parts: operating and strategic issues. To test hypothesis, this study used Korea Chaebol group survey data set.Acording to the results, it was verified that the bargaining p ower generated from subsidiary’s recource was only restricted to the strategic issu es. Furthermore, it was found that subsidiary’s resource level and resource flexibility have positive efects on the strategic