Headquarters–subsidiary relationships from a social psychological perspective: how perception gaps concerning the subsidiary's role may lead to conflict

Schmid, Stefan; Daniel, Andrea

doi:10.1017/cbo9780511973352.009

Cited by 5 publications

(3 citation statements)

References 76 publications

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“…How MNC parents build internal legitimacy is not a straightforward consideration, however. It is not just that the HQ-subsidiary relationship is often characterized by conflict and resistance due to geographic distance and cross-border tensions (Balogun et al, 2011;Birkinshaw et al, 2000;Bouquet & Birkinshaw, 2008b;Clark & Geppert, 2011;Geppert, Becker-Ritterspach, & Mudambi, 2016;Jarzabkowski & Balogun, 2009;Mudambi & Navarra, 2004;Schmid & Daniel, 2011;Schotter & Beamish, 2011). In addition, there is not always a simple dyadic relationship between MNC parents and subsidiaries, since MNCs are often composed of nested hierarchical relationships between corporate headquarters, regional headquarters and subsidiaries (Hoenen & Kostova, 2015) rather than linear chains of decision-making.…”

Section: Legitimacy In Mncsmentioning

confidence: 99%

The interplay between HQ legitimation and subsidiary legitimacy judgments in HQ relocation: A social psychological approach

2017

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This paper marks a departure from the focus on external stakeholders in much research on legitimacy and Multinational Corporations, adopting a social psychological approach to study how MNCs build internal legitimacy for controversial decisions with their subsidiaries. We explore this through a longitudinal, real-time qualitative case study of a regional office relocation, since office relocations represent rare yet significant strategic decisions. We analyze the interplay between the legitimation strategies of senior managers and subsidiary legitimacy judgments, based in instrumental, relational, and moral considerations, and how the relationship between the two develops over time. From this analysis we derive inductively a process model that reveals the dynamics of building internal legitimacy with subsidiaries, and how an MNC moves on even in the absence of full legitimacy, when dealing with controversial MNC decisions. The model highlights two important dynamics. The first is a dynamic between legitimation strategies and legitimacy judgments and how this is influenced by local subsidiary contexts. The second is a temporal dynamic in how both the legitimation strategies and legitimacy judgments evolve over time. Our model contributes to research on legitimacy in MNCs, what we know about tensions that characterize MNC sub-unit relationships, and research on headquarters relocation.

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Section: Legitimacy In Mncsmentioning

confidence: 99%

The interplay between HQ legitimation and subsidiary legitimacy judgments in HQ relocation: A social psychological approach

2017

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“…Through the study of low-intensity conflict, we come to know more also about the general nature of conflict in MNCs. In particular, the dynamics between conflict, power and perception gaps are important to understand (Schmid and Daniel, 2011). Accordingly, we think that further investigation into low-intensity conflict will bring us closer to understanding what is going on in units when different interests and perceptions emerge and persist.…”

Section: Discussionmentioning

confidence: 99%

Low-intensity conflict in multinational corporations

Lauring

Andersen

Storgaard

et al. 2017

MBR

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Purpose-Inter-unit conflict in MNCs is an important and well-researched theme. However, while most studies have focused on open conflicts acknowledged by both headquarters and subsidiaries, much less research has dealt with low intensity conflicts caused by power asymmetries. Still, low intensity conflicts can be highly damagingnot least because they are rarely resolved. Thus, we set out to identify why and in which form low intensity conflict develops, as perceived by low power subsidiary representatives, in the interaction between MNC headquarters and subsidiaries. Design/methodology/approach-We use a qualitative approach to understand low intensity conflict relying on 170 interviews in four Danish MNCs. Findings-We describe antecedents of low intensity conflict and identify four types of actions by HQ representatives that can lead to the development of such conflicts, namely ignoring, bypassing, assuming, and educating. Originality/value-Very few studies have dealt with low intensity conflictnot least in international business research. We argue that the study of low intensity conflict in MNCs can provide us with relevant, novel knowledge of MNC functioning.

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“…Yet this literature often implicitly assumes that subsidiary roles are assigned by headquarters, when in reality the perceptions of headquarters and the subsidiary may diverge (Birkinshaw et al, 2000;Chini et al, 2005;Denrell et al, 2004;Schmid & Daniel, 2011). To the extent that both parties are aware of such divergent perceptions, tensions can arise between headquarters and subsidiaries.…”

Section: Strategy Implementation In the Mncmentioning

confidence: 99%

Strategy implementation and decision making in the broader MNC network

Gysan¹

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Headquarters–subsidiary relationships from a social psychological perspective: how perception gaps concerning the subsidiary's role may lead to conflict

Cited by 5 publications

References 76 publications

The interplay between HQ legitimation and subsidiary legitimacy judgments in HQ relocation: A social psychological approach

The interplay between HQ legitimation and subsidiary legitimacy judgments in HQ relocation: A social psychological approach

Low-intensity conflict in multinational corporations

Strategy implementation and decision making in the broader MNC network

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