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1 – 10 of 476This study aims to discuss not only the relationship between performance and cooperation but also discusses whether a subsidiary should prioritize performance above cooperation or…
Abstract
Purpose
This study aims to discuss not only the relationship between performance and cooperation but also discusses whether a subsidiary should prioritize performance above cooperation or whether a subsidiary should prioritize cooperation above performance. In addition, because the headquarters-subsidiary relationship influences the subsidiaries, the perception gaps (PGs) between headquarters and subsidiaries are taken as moderators to explore when there are perception differences between headquarters and subsidiaries and the effect on the relationship between subsidiaries’ cooperation (SCO) and performance (SP).
Design/methodology/approach
This study obtained the data through a survey of 170 subsidiaries in China; chief executive officer or senior managers were selected as the data collection sources. AMOS analysis was used to address sophisticated data analysis issues.
Findings
The empirical evidence indicates that subsidiary capabilities have direct impacts on SCO and SP. In addition, SCO and performance have mediating effects. More specifically, SCO has a full mediating effect and SP has a partial mediating effect. For the moderating effects, the PG weakens the effect of SCO on SP.
Originality/value
This study contributes to the literature on subsidiary capabilities by offering a headquarters-subsidiary relationship model. As both the conceptual and empirical research studies on this topic are still underdeveloped, the study provides fresh insights into collaborative management and offers significant theoretical and managerial implications. Specifically, this study focuses on the impacts that subsidiary capabilities and PG have on cooperation and performance.
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This study examined the relationship between the headquarters and the foreign subsidiaries of multinational corporations (MNCs). Hypotheses concerning the strategies pursued by…
Abstract
This study examined the relationship between the headquarters and the foreign subsidiaries of multinational corporations (MNCs). Hypotheses concerning the strategies pursued by each MNC, intergroup conflict, conflict management styles, integrating mechanisms, and the effectiveness of the headquarters‐subsidiary relationship are developed and tested. There were no significant differences in the intergroup conflict experienced by subsidiaries pursuing different international strategies. However, effectiveness of the headquarters‐subsidiary relationship was negatively related to intergroup conflict. The use of the avoiding style of conflict management was negatively related to the effectiveness of the headquarters‐subsidiary relationship, as hypothesized. For MNCs pursuing global integration strategies, the use of personal integrating mechanisms and integrating conflict management styles were negatively related to intergroup conflict. For MNCs pursuing local responsiveness strategies, the use of bureaucratic integrating mechanisms and dominating conflict management styles were not negatively related to inter‐group conflict. This ran counter to expectations. MNCs pursuing multi‐focal strategies did not fit neatly into either strategy camp—global integration or local responsiveness.
Adrian Schulte Steinberg and Sven Kunisch
Despite the increasing use of the agency perspective in studies of headquarters-subsidiaries relations in the multinational corporation (MNC), opponents fundamentally question its…
Abstract
Despite the increasing use of the agency perspective in studies of headquarters-subsidiaries relations in the multinational corporation (MNC), opponents fundamentally question its utility. In an attempt to contribute to this debate, we evaluate prior studies and develop considerations for future research. Our review of extant studies of headquarters-subsidiaries relations that make (explicit) use of the agency perspective reveals two significant shortcomings. First, we identify a need to validate the underlying assumptions when using the agency perspective in studies of headquarters-subsidiaries relations. Second, we detect a need to better account for the complex nature of headquarters-subsidiary relations in the MNC. A focus on these two areas can improve the use of the agency perspective and, ultimately, help resolve the contentious debate over the utility of the agency perspective.
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Hanane Beddi and Ulrike Mayrhofer
The purpose of this paper is to examine the role of location in the relationships established between headquarters and foreign subsidiaries.
Abstract
Purpose
The purpose of this paper is to examine the role of location in the relationships established between headquarters and foreign subsidiaries.
Design/methodology/approach
The empirical study is based on three in‐depth case‐studies of French multinationals. The authors conducted 31 interviews with managers from both the headquarters and foreign subsidiaries.
Findings
The findings of the study indicate that headquarters‐subsidiaries relationships are shaped by the location of subsidiaries in emerging economies, and more specifically by the cultural, administrative, geographic and economic distance between the headquarters and foreign subsidiaries.
Originality/value
The analysis focuses on new challenges faced by multinational enterprises (MNEs) from mature economies, considering the growing importance of subsidiaries located in emerging countries.
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Julio Sánchez Loppacher, Raffaella Cagliano and Gianluca Spina
According to the reviewed literature, in order to build effective and efficient global supply (GS) strategies, multinational companies (MNCs) need to define and implement adequate…
Abstract
Purpose
According to the reviewed literature, in order to build effective and efficient global supply (GS) strategies, multinational companies (MNCs) need to define and implement adequate headquarters' control and follow‐up systems for GS management performance in order to guarantee world supply consistence and alignment. The purpose of this paper is to shed some light on how key variables affect GS headquarters‐subsidiary control systems and their complementary behaviours across culturally similar business units.
Design/methodology/approach
Multiple case study methodology, with a sample including seven Italian MNCs, has expanded their operations to the Mercosur area (Latin America's Southern Common Market) and designed to guarantee theoretical replication in the analysis of the empirical evidence.
Findings
It was found that, although cultural similarities strongly influence MNCs' GS headquarters‐subsidiary control systems, other factors, such as purchasing and globalization sourcing strategy centralization and globalization process evolution, lead companies to implement complementary formal control systems that are consistent with the sharply personalized profile set by cultural proximity.
Research limitations/implications
In order to expand and deepen these conclusions, further research will be necessary to validate these findings in a wider sample, including companies from various countries of origin and destination. In any case, a longitudinal study could help to shed some light on the evolution of headquarters‐subsidiary relationships within global sourcing strategies.
Originality/value
The paper enables better understanding of the impact of and interactions between key driving factors in GS headquarters‐subsidiary control systems in cases of strong cultural similarities through a multi‐case sample study.
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Zhijun Chen and Li Zheng
The purpose of this paper is to explore the influence of subsidiary autonomy on subsidiary performance under uncertainty. Based on previous studies, the authors classify…
Abstract
Purpose
The purpose of this paper is to explore the influence of subsidiary autonomy on subsidiary performance under uncertainty. Based on previous studies, the authors classify subsidiary autonomy into two categories, namely, strategic autonomy and operational autonomy, and investigate the relationships between these two categories of subsidiary autonomy and subsidiary performance under uncertainty.
Design/methodology/approach
The sample includes the subsidiaries listed on the Shanghai and Shenzhen Stock Exchanges in China from 2012 to 2015. Ordinary least squares are used to examine the hypotheses.
Findings
The results indicate that strategic autonomy is negatively related to subsidiary performance, whereas operational autonomy is positively associated with subsidiary performance. Moreover, uncertainty weakens the negative strategic autonomy-subsidiary performance linkage.
Originality/value
The findings of this study indicate that two categories of subsidiary autonomy (strategic autonomy, operational autonomy) have different effects on subsidiary performance. Moreover, uncertainty moderates the above relationships. This study explores the relationship between subsidiary autonomy and subsidiary performance and provides a useful guidance for the selection of subsidiaries’ management modes.
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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 boundary…
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.
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Dorota Piaskowska, Esther Tippmann, Tina C. Ambos and Pamela Sharkey Scott
Today’s MNCs need to adopt smart ways of organizing to tap into the potential of their complex internal and external relationships. This requires MNCs to identify the relevant…
Abstract
Purpose
Today’s MNCs need to adopt smart ways of organizing to tap into the potential of their complex internal and external relationships. This requires MNCs to identify the relevant relationships and to develop appropriate relational skills and capabilities. Hence this chapter addresses two key questions: what kind of relational structures and qualities are conducive to value creation, and how can MNCs best develop and utilize their complex relationships?
Methodology/approach
The chapter reviews the main developments in the area of MNC organizing to date. Subsequently three examples of novel on-going research into MNC relationships are presented. Finally avenues for future research and links to related areas in international business research are discussed.
Findings
The relational perspective on the MNC is well-established. Past research, however, has mostly taken the view of the headquarters-subsidiary dyad without fully conceptualizing the multiplicity of relationships and interdependencies of individuals, groups, and units in the MNC. This chapter uncovers the relational skills required to improve MNC value creation abilities by influencing and leveraging connections among disparate units and individuals to tap their expertise and creative potential. This includes insights into abilities for managing and balancing multiple networks, abilities for mobilizing relevant network actors when driving bottom-up processes, and abilities for facilitating connections and collaboration among different actors.
Originality/value
This chapter advances the understanding and practice of multinational organizing. It presents novel ways to systematically address the complexities and interdependencies of relational effects on the ability of MNCs to create value.
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Fatemeh Rahimi, Charles Møller and Lars Hvam
The purpose of this paper is to explore the fit between process standardization and international management strategy of multinational corporations (MNCs) by assessing the…
Abstract
Purpose
The purpose of this paper is to explore the fit between process standardization and international management strategy of multinational corporations (MNCs) by assessing the compatibility between process standardization and corporate structural characteristics in terms of asset configuration and headquarters-subsidiary relationships.
Design/methodology/approach
First, after a literature review on MNCs’ strategy and process standardization, the study suggests two propositions on the fit between corporate international management strategy and process standardization. Second, to empirically examine the propositions, the study investigates the outcome of process standardization in three cases with different strategic and structural contexts. Third, using the propositions and empirical findings, the study proposes a framework for aligning process standardization with MNCs’ structural characteristics.
Findings
Process standardization has a higher degree of fit in MNCs pursuing global integration where process standardization parallels the need for coordinating interdependencies in the functional structure, and is consistent with the headquarters’ operational control over the subsidiaries. Process standardization has a lower degree of fit in MNCs seeking local responsiveness as process standardization disturbs the financial control relationship between the headquarters and subsidiaries and is less crucial for coordination as the subsidiaries contain the necessary coordination mechanisms.
Originality/value
The study provides in-depth understanding of how the international management strategy and consequent structural characteristics of MNCs affects process standardization in the course of a global enterprise resource planning implementation. The study proposes conditions of fit for aligning process standardization with asset configuration and headquarters-subsidiary relationships of an MNC.
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This paper aims to provide an institutional‐cognitive explanation for headquarters‐subsidiary conflicts based on institutionalism and social psychological studies on rationality.
Abstract
Purpose
This paper aims to provide an institutional‐cognitive explanation for headquarters‐subsidiary conflicts based on institutionalism and social psychological studies on rationality.
Design/methodology/approach
The paper is based on an empirical qualitative study of German SMEs with subsidiaries in China and on the analysis of the German press on China.
Findings
The study shows that headquarters take decisions on internationalization under legitimation pressure, which pushes companies to reorganize in accordance with what is considered successful, appropriate, and common practice in the field. However, apparently very profitable and hence strongly legitimated options can lead to the creation of expectations based more on wishful thinking than on the reality that subsidiary managers have to address. This can foster conflicts between headquarters and a subsidiary.
Research limitations/implications
Being based on a qualitative empirical study, the paper cannot provide a precise measure of the relationship between legitimation and cognition in headquarter‐subsidiary conflicts but instead identifies theoretical relationships between the two dimensions that can be investigated further in future research.
Practical implications
The findings of this study highlight the necessity for research to devote more critical attention to decision‐making processes about internationalization and for companies to reflect on the driving forces for their decision making as well as the consequences in terms of potential conflicts.
Originality/value
By investigating the relationship between cognitive mechanisms and social processes of legitimation, the paper goes beyond a purely macro or micro explanation of conflict which characterizes both mainstream and critical approaches.
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