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1 – 10 of 110
Book part
Publication date: 23 August 2017

Victor Meins Pedersen and Sebastian Spon Kofod-Jensen

As multinational corporations are becoming larger and more complex, it becomes increasingly difficult to balance between the need for overall standardization in the…

Abstract

As multinational corporations are becoming larger and more complex, it becomes increasingly difficult to balance between the need for overall standardization in the multinational corporation (MNC) and the need for local responsiveness. In order to allow subsidiaries to react on challenges and opportunities within their local markets, they should be granted with a certain level of decision-making autonomy. However, this freedom can facilitate a misalignment of activities among the headquarters and its subsidiaries.

This study suggests that subsidiaries should be granted with the autonomy to pursue own activities. There should, however, be limits to their independence, which should be aligned through a dialogue between the headquarters and the subsidiary. This study finds a positive correlation between strategic and operational autonomy and subsidiary performance when these are combined with a strong intra-organizational network relationship. Furthermore, the study argues that within operational autonomy it is important to distinguish between everyday activities that do not need approval from headquarters, and activities that should be decided in collaboration between the headquarters and the subsidiary. Subsidiaries that are operating in technological complex markets should be granted with the autonomy to take advantage of inter-organizational network relationships in order to exploit local knowledge and capabilities. However, this poses the risk of the subsidiaries losing connectivity to the MNC. In order to reduce this risk, the headquarters should combine such initiatives with a strong collaboration with its subsidiaries.

By establishing a strong intra-organizational network relationship, autonomy can have a positive effect on subsidiary performance.

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…

1979

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.

Book part
Publication date: 10 August 2016

Randi Lunnan, Sverre Tomassen and Gabriel R. G. Benito

The chapter examines how distance, integration mechanisms, and atmosphere influence the level of organizing costs and subsidiary initiatives in headquarter–subsidiary

Abstract

The chapter examines how distance, integration mechanisms, and atmosphere influence the level of organizing costs and subsidiary initiatives in headquarter–subsidiary relationships. Survey data were collected at the subsidiary level in one major Norwegian multinational company. Empirical analyses were based on regression and partial correlation analyses. Organizing costs are driven by distance to headquarters as well as the integration mechanisms and the atmosphere that exists in subsidiary–headquarter relationships. Another important insight gained by this study is that integration mechanisms influence subsidiary initiatives.

Details

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

Keywords

Article
Publication date: 1 February 2000

Vivienne Shaw

Presents the findings of a study of the successful international marketing strategies and headquarter‐subsidiary relationships of 186 German companies operating in the UK…

3073

Abstract

Presents the findings of a study of the successful international marketing strategies and headquarter‐subsidiary relationships of 186 German companies operating in the UK. A strong product orientation combined with a high level of market orientation was found to characterise successful German companies in the UK. Whilst both successful and less successful companies were found to adopt an ethnocentric approach with regard to strategic and product‐related issues the top performers did enjoy greater financial independence and a high degree of autonomy in day‐to‐day marketing decision making.

Details

European Journal of Marketing, vol. 34 no. 1/2
Type: Research Article
ISSN: 0309-0566

Keywords

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.

6008

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

Keywords

Article
Publication date: 17 June 2008

Hsi‐Mei Chung

Based on the panel data analysis of Taiwan’s family business groups from 2000 to 2002, this research attempts to investigate the relationships among the types of ownership…

Abstract

Based on the panel data analysis of Taiwan’s family business groups from 2000 to 2002, this research attempts to investigate the relationships among the types of ownership structure, particularistic ties, and the engagements in regional markets from a social capital perspective. The result indicates that a family business group’s use of particularistic ties is contingent on its relative centralization in decision‐making. Consequently, the family business group’s use of particularistic ties in subsidiaries significantly influences its engagements in regional markets. This study highlights the possible role of particularistic ties as a kind of firm‐specific advantage existing within family business groups when expanding internationally. Furthermore, it indicates that the indigenous particularistic ties intrinsic to Great China societies have implications for multinational companies in the context of this region.

Details

Multinational Business Review, vol. 16 no. 2
Type: Research Article
ISSN: 1525-383X

Keywords

Open Access
Article
Publication date: 8 July 2022

Alice Schmuck, Katarina Lagerström and James Sallis

This study aims to understand the performance implications of when a business internationalizes. Many managers take the performance implications of internationalization…

Abstract

Purpose

This study aims to understand the performance implications of when a business internationalizes. Many managers take the performance implications of internationalization for granted. Whether seeking a broader customer base or cost reduction through cross-border outsourcing, the overwhelming belief is that internationalization leads to higher profits.

Design/methodology/approach

This paper offers a systematic review, content analysis and cross-tabulation analysis of 115 empirical studies from over 40 major journals in management, strategy and international business between 1977 and 2021. Focusing on research settings, sample characteristics, underlying theoretical approaches, measurements of key variables and moderators influencing the multinationality and performance relationship, this study offers a detailed account of definitions and effects.

Findings

The findings of this study suggest a tenuous connection between internationalization and performance. No strain of research literature conclusively identifies a consistent direct path from internationalization to performance. The context specificity of the relationship makes general declarations impossible.

Research limitations/implications

Future researchers should recognize that internationalization is a process taking different forms, with no specific dominant form. General declarations are misleading. The focus should be on the process of internationalization rather than on the outcome.

Originality/value

This study contributes to the international business literature by exploring reasons for the inconsistent results and lack of consensus. Through a detailed account of definitions and effects, this paper explores the lack of consensus as well as the identified shapes of the relationship.

Details

critical perspectives on international business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1742-2043

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…

1970

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. 32 no. 1
Type: Research Article
ISSN: 2059-6014

Keywords

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

Keywords

Article
Publication date: 2 May 2017

Hammad ul Haq

Subsidiaries use their weight and/or voice to get attention for the initiatives they share with the headquarters. The purpose of this paper is to examine whether…

Abstract

Purpose

Subsidiaries use their weight and/or voice to get attention for the initiatives they share with the headquarters. The purpose of this paper is to examine whether subsidiaries with a low weight can effectively use their voice to get the headquarters’ attention.

Design/methodology/approach

This paper is a combination of the attention-based view of the firm and the issue-selling literature applied to the context of subsidiaries selling their initiatives to the headquarters of a multinational corporation.

Findings

Subsidiaries with a low weight are trapped in a vicious circle in which they are unable to get more influence and gain a central position in the organization through the initiative-taking approach. This problem may mainly be attributed to their limited access to (or even entire lack of) direct and rich communication with the headquarters, which impedes the ability of these subsidiaries to gain knowledge about headquarters and the organization in general. As a result, low-weight subsidiaries are unable to make the correct decisions about which selling moves to use regarding initiatives that are able to capture headquarters’ attention; this inability means that they are less likely to gain approval from headquarters for implementing the proposed initiatives.

Originality/value

Subsidiary voice is not an accessible and effective bottom-up tool available to low-weight subsidiaries for gaining influence, which is contrary to what is claimed by extant mainstream research in international business and strategy. Hence, subsidiaries with low weight are completely marginalized from the sharing of subsidiary initiatives that takes place within multinational corporations.

Details

critical perspectives on international business, vol. 13 no. 2
Type: Research Article
ISSN: 1742-2043

Keywords

1 – 10 of 110