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Book part
Publication date: 17 February 2017

Alexei Koveshnikov, Mats Ehrnrooth and Eero Vaara

The article develops a model which conceptualizes headquarter-subsidiary relations in the multinational corporation as a multilevel discursive struggle between key…

Abstract

The article develops a model which conceptualizes headquarter-subsidiary relations in the multinational corporation as a multilevel discursive struggle between key managers. At the first level, the relations are conceptualized as a discursive struggle over decisions and actions using rationalistic discourses. At the second level, they are viewed as a discursive struggle over power relations using control and autonomy discourses. Finally, underlying the first two, at the third level, headquarter-subsidiary relations are conceptualized as a discursive struggle over managers’ worldviews using cultural (pre)conceptions about “the self” and “the other.”

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Multinational Corporations and Organization Theory: Post Millennium Perspectives
Type: Book
ISBN: 978-1-78635-386-3

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Book part
Publication date: 4 October 2019

Rick Delbridge, Takahiro Endo and Jonathan Morris

This chapter presents an in-depth inductive analysis of a parent organization and the network of subsidiaries that it has created. The authors identify the significance of…

Abstract

This chapter presents an in-depth inductive analysis of a parent organization and the network of subsidiaries that it has created. The authors identify the significance of organizational processes label as “disciplining entrepreneurialism.” These are activities that encourage entrepreneurial individuals to propose and lead new businesses while also promoting strong identification with the parent firm. The authors explore the emergence of this phenomenon through an examination of subsidiaryheadquarter relations. While conventional conceptualization of inter-organizational collaboration has tended to exclude ­subsidiaryheadquarter network relationships, we use the Systems of Exchange framework (Biggart & Delbridge, 2004) to categorize disciplined entrepreneurship alongside market, hierarchy, and network relations. Disciplining entrepreneurialism is not experienced as either market nor hierarchy by the individual members in the subsidiaries, and these subsidiaries move between the two in ways that are not adequately captured as a network either. This disciplining entrepreneurship approach can thus be contrasted with networks as well as differentiated from both markets and hierarchies. Entrepreneurship is encouraged while maintaining commitment to the overarching enterprise of the parent company.

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Managing Inter-organizational Collaborations: Process Views
Type: Book
ISBN: 978-1-78756-592-0

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Article
Publication date: 27 April 2012

Matthias D. Mahlendorf, Jochen Rehring, Utz Schäffer and Elmar Wyszomirski

This paper aims to investigate the ability of performance measurement systems (PMS) that were implemented by headquarters at foreign subsidiaries to influence decisions…

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Abstract

Purpose

This paper aims to investigate the ability of performance measurement systems (PMS) that were implemented by headquarters at foreign subsidiaries to influence decisions made by the subsidiary. This is important because PMS are important control mechanisms in the relationship between headquarters and subsidiaries within multinational firms.

Design/methodology/approach

Acknowledging that controlling foreign subsidiaries is particularly challenging when they are geographically distant to headquarters, the authors collect survey‐based data from Chinese subsidiaries of multinational firms. They develop several hypotheses which are tested on a sample of 148 subsidiaries using multiple regression analysis.

Findings

The results suggest that the influence of headquarter‐designed PMS on subsidiary decisions is higher when the compensation of subsidiary management is linked to PMS, when additional formal control is enforced, when PMS are affected by external events, when PMS are comprehensive, and when subsidiaries are embedded into the local business environment. Also, the authors find a negative interaction effect between comprehensive PMS and the extent to which PMS are affected by external events on the decision‐influence of PMS.

Research limitations/implications

Limitations arise from the study setting in China. As management accounting research originates from and has mostly focused on Western countries, it remains somewhat unclear whether the constructs and instruments used in this study are fully transferable to China, despite the statistical and conceptual remedies that were applied.

Originality/value

The study offers new insights into the role of PMS in multinational companies. It extends earlier research by offering empirical evidence from one of the most important emerging economies. As such, the results are relevant for almost every global firm using PMS to control foreign subsidiaries.

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Book part
Publication date: 17 February 2017

Julia Brandl and Anna Schneider

How headquarter (HQ) and subsidiary actors end conflicts and reach agreements is an important but still under-researched question in multinational corporations (MNC…

Abstract

How headquarter (HQ) and subsidiary actors end conflicts and reach agreements is an important but still under-researched question in multinational corporations (MNC) literature. This conceptual article approaches these conflict dynamics from the Convention Theory perspective. Convention Theory draws attention to justice principles (known as “order of worth”) and to the material aspects in relations between MNC actors. We offer a framework that contributes to HQ-subsidiary relations research in three ways: (1) it links conflicts to justice principles, (2) it enriches the understanding of the stability of agreements, and (3) it sheds light on the activities needed for realizing preferred arrangements.

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Multinational Corporations and Organization Theory: Post Millennium Perspectives
Type: Book
ISBN: 978-1-78635-386-3

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Article
Publication date: 31 July 2009

Luciano Barin Cruz and Eugênio Avila Pedrozo

The purpose of this paper is to propose potential challenges faced by multinational companies (MNCs) managing corporate social responsibility (CSR) strategies.

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5818

Abstract

Purpose

The purpose of this paper is to propose potential challenges faced by multinational companies (MNCs) managing corporate social responsibility (CSR) strategies.

Design/methodology/approach

The paper is based on two inductive case studies of French MNCs in the retail sector. Data from interviews and documents were collected and analysed at the headquarters in France and the Brazilian subsidiary.

Findings

The paper contributes in the following ways: five challenges are proposed that must be faced by MNCs in managing their CSR strategy. The challenges are related to the link between literature and three dimensions and five sub‐dimensions that emerged from the two cases studied: the governance structure (the structure of the CSR department and dialogue with stakeholders); corporate ethics (the definition of objectives and corporate posture); and organizational learning (awareness and information exchanged about CSR).

Research limitations/implications

As this is a topic that is little addressed by the CSR's literature, a future research agenda for the relation between the headquarters and the subsidiary in considering CSR strategies can be established. It is suggested that the five challenges presented here should be deeply explored and potential solutions for each one can be investigated in depth.

Practical implications

The proposed challenges can yield some implications for managers of MNCs who are intending to manage the headquarters/subsidiary relationship considering the MNCs' CSR strategies. They should identify adapted ways to introduce actions related to the three dimensions and five sub‐dimensions presented here.

Originality/value

Little attention has been paid to this specific link between CSR and MNC literature: the relation between the headquarters and the subsidiary considering CSR strategies. This paper proposes some challenges that can help researchers investigate potential solutions and managers to have an agenda to be addressed.

Details

Management Decision, vol. 47 no. 7
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 4 August 2021

Igor Gurkov and Ivan Shchetinin

This paper aims to detail the actions of the Russian subsidiary of a multinational IT company, during the COVID–19 pandemic, aimed toward the exploration and exploitation…

Abstract

Purpose

This paper aims to detail the actions of the Russian subsidiary of a multinational IT company, during the COVID–19 pandemic, aimed toward the exploration and exploitation of unexpected business opportunities. It depicts the strategic and tactical actions of the subsidiary and corporate initiatives during the pandemic, revealing tensions between the subsidiary and its corporate parent on implementation of each’s initiatives.

Design/methodology/approach

A case study is presented, based on action research, using internal documents from the company under consideration, participation in various working meetings, meetings with customers and interviews with subsidiary management.

Findings

The strategic actions implemented by the subsidiary during the pandemic exemplify strategic agility, i.e. a set of activities carried out by a company that create value in a turbulent and unpredictable environment which in turn require systematic variations in specific processes, products and structures. Some of those variations included the unauthorized amendment of internal corporate rules, leading to tensions between the subsidiary and parent company. This case illustrates that such parent-subsidiary tensions are an inevitable element of achieving agility at the subsidiary level, especially during rapid and unpredictable changes in the business environment.

Research limitations/implications

This study presents the flow of events in one multinational corporation subsidiary. However, the authors speculate that similar situations (subsidiary actions exploiting emergent business opportunities and which have been restricted by rigid internal corporate rules and regulations and low receptivity from corporate headquarters) occurred in many multinational corporation subsidiaries, aiming to explore and exploit nascent business opportunities in local markets during the pandemic.

Practical implications

The study confirms the necessity for the review of the functioning of the corporate immune system of large multinational corporations to allow more subsidiary initiatives to flourish than before the pandemic.

Originality/value

The paper presents a case of strategic agility at subsidiary level during the pandemic. It also uncovers the black-boxing managerial decision-making processes in headquarters-subsidiary relations during the extreme turbulence of business environment.

Details

Review of International Business and Strategy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2059-6014

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Book part
Publication date: 10 August 2016

Rajesh Kumar and Jens Gammelgaard

We demonstrate the role of regulatory fit and moral emotions, that is, contempt and anger, in influencing conflict resolution between the headquarters and subsidiary

Abstract

We demonstrate the role of regulatory fit and moral emotions, that is, contempt and anger, in influencing conflict resolution between the headquarters and subsidiary boundary spanners. We develop a theoretical framework, which integrates literature on international business and headquarters-subsidiary relationships with regulatory focus, moral emotions, and conflict resolution. The chapter outlines the relationships between the regulatory focus of a headquarters’ boundary spanner, and his or her manner of engagement, conflict sensitivity, violation of code, moral emotions, and the way conflicts are resolved. The theoretical framework developed here provides a starting point for future research on bargaining processes between boundary spanners of a multinational corporation (MNC). This chapter is the first one to discuss regulatory focus, and moral emotions, in the contexts of a MNC headquarters-subsidiary relationship.

Details

Perspectives on Headquarters-subsidiary Relationships in the Contemporary MNC
Type: Book
ISBN: 978-1-78635-370-2

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Article
Publication date: 24 April 2018

Diana Rosemary Sharpe

The purpose of this paper is to discuss the contributions that critical realist ethnographies can make to an understanding of the multinational corporation.

Abstract

Purpose

The purpose of this paper is to discuss the contributions that critical realist ethnographies can make to an understanding of the multinational corporation.

Design/methodology/approach

This paper draws on a discussion of methodological challenges in researching the multinational corporation and the ways in which critical realist ethnographies can respond to these challenges. The example of research on the transfer of management practices is used to illustrate this.

Findings

Taking the example of researching the transfer of management practices within the multinational, the paper argues that the potential of critical realist ethnography including critical realist global ethnography to contribute to the field of International Business and International Management remains relatively untapped.

Research limitations/implications

Adopting the sociological imagination of the critical realist ethnographer has implications for the kinds of questions that are asked by the researcher and the ways in which we seek to address these methodologically. Researching from a critical standpoint fruitful empirical themes for further research relate to the experience of change for example in business systems, internationalization of organizations and “globalization”.

Practical implications

The critical realist ethnographer can contribute insights into the complex social and political processes within the multinational and provide insights into how social structures are both impacting on and impacted by individuals and groups. Ethnographic research located within a critical realist framework has the potential to address questions of how stability and change take place within specific structural, cultural and power relations.

Originality/value

At the methodological level, this paper highlights the potential of critical realist ethnography in researching the multinational, in addressing significant questions facing the critical researcher and in gaining a privileged insight into the lived experience of globalization.

Details

critical perspectives on international business, vol. 14 no. 4
Type: Research Article
ISSN: 1742-2043

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Article
Publication date: 19 September 2016

Satwinder Singh, Geoffrey Wood, Jaithen Alharbi and Tamer K. Darwish

This purpose of this paper is to explore variations in the extent of control mechanisms, according to country of origin and organizational characteristics, in a…

Abstract

Purpose

This purpose of this paper is to explore variations in the extent of control mechanisms, according to country of origin and organizational characteristics, in a challenging country of domicile.

Design/methodology/approach

A survey research design involving the use of a questionnaire as the primary data source was adopted. A total of 350 subsidiaries were initially randomly selected and contacted in person, or via telephone and e-mail, of which 147 agreed to take part in the study and responded to the survey.

Findings

The authors find that Multinational Enterprises (MNEs) from highly financialized Liberal Market Economies will be associated with a greater reliance on formalized control mechanisms; this will enable the MNE’s headquarters to closely monitor subsidiary managers according to objective measures, to ensure that the maximum shareholder value is released.

Research limitations/implications

This study reveals a greater reliance on control mechanisms in larger firms, reflecting a desire to maximize bureaucratic economies of scale.

Practical implications

The authors find that the presence of expatriates regardless of country of origin leads to greater decentralization, suggesting foreign firms do not trust local staff.

Originality/value

This is one of the few studies of this nature conducted for the region of Middle East – and the only one the authors are aware of for Saudi Arabia. Further, it sheds new light on the impact of contextual circumstances on how closely firms monitor their subsidiaries, the challenges of doing business in the Gulf region and the consequences of the large-scale usage of expatriates.

Details

Multinational Business Review, vol. 24 no. 3
Type: Research Article
ISSN: 1525-383X

Keywords

Open Access
Article
Publication date: 4 August 2021

Matthew Davis, Thomas Taro Lennerfors and Daniel Tolstoy

The purpose of the study is to explore, with anchorage in theories about the normalization of corruption, under what conditions blockchain technology can mitigate…

Abstract

Purpose

The purpose of the study is to explore, with anchorage in theories about the normalization of corruption, under what conditions blockchain technology can mitigate corruptive practices of multinational enterprises (MNEs) in emerging markets (EMs).

Design/methodology/approach

By synthesizing a technological perspective and theory on corruption, the authors examine the feasibility of blockchain for fighting corruption in MNEs’ business operations in EMs.

Findings

Blockchain technology is theorized to have varying mitigating effects on the rationalization, socialization and institutionalization of corruption. The authors provide propositions describing the effects and the limitations of blockchain for mitigating corruption in EMs.

Social implications

This paper offers a perspective for how to tackle acute business problems and social problems pronounced in international business but also prevailing elsewhere.

Originality/value

The study contributes to literature in international management by systematically exploring how and under what conditions blockchain can mitigate the normalization of corruption.

Details

Review of International Business and Strategy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2059-6014

Keywords

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