How do subsidiaries assume autonomy? A refined application of agency theory within the subsidiary‐headquarters context

Cavanagh, Andrew; Freeman, Susan; Kalfadellis, Paul; Çavuşgil, S. Tamer

doi:10.1002/gsj.1152

Cited by 27 publications

(43 citation statements)

References 52 publications

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“…These tasks or responsibilities may be related to a product, market, or value-added scope in existing or new functions for the subsidiary (Dorrenbacher & Gammelgaard, 2006). Extant research details the various types of subsidiary mandates or "charters" (Bouquet & Birkinshaw, 2008a;Cantwell & Mudambi, 2005;Galunic & Eisenhardt, 1996) and more recently explores how subsidiaries develop or manage the evolution of their mandates (Andersson et al, 2007;Cavanagh, Freeman, Kalfadellis, & Cavusgil, 2017;Dorrenbacher & Gammelgaard, 2016;Mudambi, Pedersen, & Andersson, 2014;Tippmann, Scott, Reilly, & O'Brien, 2018). All of these studies recognize that subsidiaries have to be cognizant of the control and power corporate HQ has over their ability to influence and "upgrade" to a more advanced mandate than initially allocated (Asakawa et al, 2017;Burger, Jindra, Marek, & Rojec, 2017;Delany, 2000;Garcia-Pont et al, 2009).…”

Section: Subsidiary Influence For Mandate Changementioning

confidence: 99%

Sowing the seeds of subsidiary influence: Social navigating and political maneuvering of subsidiary actors

Conroy

Collings

Clancy

2018

Global Strategy Journal

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Research Summary: This paper emphasizes the social and political dimensions of subsidiary influence in strategically repositioning the subsidiary's mandate. The specific skills subsidiary actors deploy in attempting to influence corporate headquarters have largely been neglected in existing literature. Drawing from a micro‐political perspective, we provide a more nuanced, fine‐grained understanding of subsidiary influence by illuminating how influence is augmented and enriched through the concomitant effects of subsidiary actors' social and political skills. Using a multiple case study analysis and drawing on qualitative interviews, we illustrate how subsidiary actors' social skills are used to continuously create, maintain, and develop spaces of social engagement with corporate decision makers, whereas political skill involves the ability to leverage social spaces by developing specific influence tactics such as targeting, showcasing, and framing. Managerial Summary: Subsidiaries of multinational companies play an increasingly dominant role in the global business environment. The role of the individual subsidiary actor in influencing corporate management is crucial to the development of the subsidiary mandate. Despite this, very little is known about the microlevel skills individual subsidiary actors draw upon to influence the development of their mandates. This article explores how subsidiary actors channel key social and political skills in strategically repositioning their mandates within the multinational enterprise. We find that subsidiary actors may use their social skills to establish increased interaction and communication with key corporate decision makers, whereas political skill is used to develop a variety of influence tactics.

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Section: Subsidiary Influence For Mandate Changementioning

confidence: 99%

Sowing the seeds of subsidiary influence: Social navigating and political maneuvering of subsidiary actors

Conroy

Collings

Clancy

2018

Global Strategy Journal

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“…This goes against the general idea that subsidiary roles are self-reinforcing and aligned with the corporate strategy, but may provide a more realistic pattern of the struggle to shape subsidiary roles in practice. Our findings also show that subsidiary roles are co-created in the interaction between HQ and subsidiaries rather than ''assigned'' by HQ or ''assumed'' independently by subsidiaries (Birkinshaw, 1996;Cavanagh, Freeman, Kalfadellis, & Cavusgil, 2017;Cavanagh, Freeman, Kalfadellis, & Herbert, 2017).…”

Section: Introductionmentioning

confidence: 51%

“…In addition, our study also shows how subsidiary roles and HQ priorities are co-created in the struggle to address tensions -instead of being ''assigned'' by HQ or ''assumed'' independently by subsidiaries (Birkinshaw, 1996;Cavanagh, Freeman, Kalfadellis, & Cavusgil, 2017;Cavanagh, Freeman, Kalfadellis, & Herbert, 2017). During the past years, several studies have called for a more nuanced view of subsidiary role formation (Balogun et al, 2011;Geppert & Williams, 2006;Schotter & Beamish, 2011), but how this process works is still poorly understood.…”

Section: Implications For the Literature On Subsidiary Rolesmentioning

confidence: 77%

“…Despite this intense discourse, it is not entirely clear whether subsidiary roles are ''assigned'' by HQ or ''assumed'' independently by subsidiaries (Birkinshaw, 1996;Cavanagh, Freeman, Kalfadellis, & Cavusgil, 2017;Cavanagh, Freeman, Kalfadellis, & Herbert, 2017), or how these are co-created. While we know that subsidiary roles are shaped and evolve over time (Balogun et al, 2011;Birkinshaw & Hood, 1998;Tippmann, Sharkey Scott, Reilly, & O'Brien, 2018), several studies have highlighted that our understanding of this issue is very fragmented.…”

Section: Local-global Tensions and Headquarters-subsidiary Relationshipsmentioning

confidence: 99%

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Managing interrelated tensions in headquarters–subsidiary relationships: The case of a multinational hybrid organization

2020

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While all multinational organizations face the challenge of managing tensions between local integration and global responsiveness, they are increasingly required to pursue additional, often paradoxical, objectives -such as social and commercial goals. However, we know little about how these tensions at the core of the MNC strategy interact. Based on an inductive qualitative study of four headquarters-subsidiary relationships in a Latin American Multinational Hybrid Organization, we develop a model showing the interplay of multiple tensions and management approaches to address them. This allows us to contribute to research on subsidiary roles, which we found to differ depending on how multiple tensions are addressed. Furthermore, we add to the literature on hybridity in multinational organizations by pointing out how regional differences between units of a single organization unfold. Finally, we provide some practical recommendations for the management of multinational hybrid organizations. Journal of International Business Studies (2020) 51, 906-932.

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“…One of the primary reasons that agents act opportunistically is that they feel they are not given access to resources, or they perceive they are too tightly controlled (Kostova, Nell and Hoenen, 2016). However self-interest may not always be driven by the agent, and there have been recent calls to explore how 'principal opportunism' may in fact be the main cause of agency problems within the MNE (Cavanagh et al, 2016;Kostova, Nell and Hoenen, 2016). Agents may also feel that they are at a 'knowledge disadvantage' to their principal, as they cannot access valuable knowledge that the principal possesses (Li et al, 2016).…”

Section: Principal-to-agent Relationshipmentioning

confidence: 99%

Regional Headquarter’s Dual Agency Role: Micro‐political Strategies of Alignment and Self‐interest

Conroy

Collings

Clancy

2017

British J of Management

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The increased research focus on the networked perspective of the multinational enterprise (MNE) reflects a greater delegation of responsibility from corporate headquarters (CHQ) to subsidiary and intermediary units such as regional headquarters (RHQ). This shift has increased the intensity of political interactions between key actors within the MNE. Despite the recent rise in studies on the micro‐political perspective of the MNE to date, little empirical work has explored this issue in the context of the CHQ–RHQ relationship. Drawing insights from agency theory and micro‐politics, the authors focus on the context in which RHQs develop micro‐political strategies in order to manage the flow and exchange of knowledge with CHQ. They show how RHQ may exhibit a ‘dual agency’ role when dealing with CHQ, in that it is characterized as a principal and agent, each requiring different micro‐political knowledge strategies. As a principal, RHQ will develop micro‐political knowledge strategies to increase alignment with CHQ. As an agent, RHQ develops micro‐political knowledge strategies to pursue its self‐interests. Having identified different RHQ agency roles, the authors develop a conceptual model that outlines how alignment and self‐interest‐seeking behaviours from RHQ are manifest through different micro‐political knowledge strategies in its agency relationship with CHQ.

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How do subsidiaries assume autonomy? A refined application of agency theory within the subsidiary‐headquarters context

Cited by 27 publications

References 52 publications

Sowing the seeds of subsidiary influence: Social navigating and political maneuvering of subsidiary actors

Sowing the seeds of subsidiary influence: Social navigating and political maneuvering of subsidiary actors

Managing interrelated tensions in headquarters–subsidiary relationships: The case of a multinational hybrid organization

Regional Headquarter’s Dual Agency Role: Micro‐political Strategies of Alignment and Self‐interest

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