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Performance effects of MNC headquarters-subsidiary conflict and the role of boundary spanners: The case of headquarter initiative rejection

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  • Schotter, Andreas
  • Beamish, Paul W.
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    Abstract

    Recent research suggests that both the scholarly and the managerial perspectives on intra-organizational conflict in multinational corporations (MNC) between headquarters (HQ) and their foreign subsidiaries have changed. Today, conflict is not necessarily regarded as dysfunctional or the result of inefficient global integration. Instead, conflict is now considered a normal consequence of organizing and managing across national borders. This research advances the literature on HQ-subsidiary relationships by adding new insights to the Headquarters-subsidiary conflict discussion, especially in the so far under-researched case of headquarter initiative rejection by foreign subsidiaries. We specifically focus on subsidiary conflict negotiation tactics, the effects of organizational and individual managerial power, and the characteristics and roles of MNC managers that act as boundary spanners during intra-organizational conflict processes. A qualitative, iterative, multiphase research approach was used to develop new theory pertaining to the phenomenon. The results show that in the presence of boundary spanners, dysfunctional conflict is less common and better overall organizational performance can be achieved for both the subsidiary and the MNC as a whole. The results also indicate that the boundary spanning ability is only partly formalizable and that some MNCs are able to foster boundary spanners better than others.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 17 (2011)
    Issue (Month): 3 (September)
    Pages: 243-259

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    Handle: RePEc:eee:intman:v:17:y:2011:i:3:p:243-259

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    Related research

    Keywords: Headquarters-subsidiary relationships Intra-organizational conflict Global integration versus local responsiveness Competing demands Boundary spanners Power;

    References

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    1. Thomas W Malnight, 1996. "The Transition from Decentralized to Network-Based MNC Structures: An Evolutionary Perspective," Journal of International Business Studies, Palgrave Macmillan, vol. 27(1), pages 43-65, March.
    2. Ram Mudambi, 2008. "Location, control and innovation in knowledge-intensive industries," Journal of Economic Geography, Oxford University Press, vol. 8(5), pages 699-725, September.
    3. Dörrenbächer, Christoph & Gammelgaard, Jens, 2006. "Subsidiary role development: The effect of micro-political headquarters-subsidiary negotiations on the product, market and value-added scope of foreign-owned subsidiaries," Journal of International Management, Elsevier, vol. 12(3), pages 266-283, September.
    4. Ram Mudambi & Pietro Navarra, 2004. "Is knowledge power? Knowledge flows, subsidiary power and rent-seeking within MNCs," Journal of International Business Studies, Palgrave Macmillan, vol. 35(5), pages 385-406, September.
    5. Birkinshaw, Julian & Holm, Ulf & Thilenius, Peter & Arvidsson, Niklas, 2000. "Consequences of perception gaps in the headquarters-subsidiary relationship," International Business Review, Elsevier, vol. 9(3), pages 321-344, June.
    6. Chang-Bum Choi & Paul W Beamish, 2004. "Split management control and international joint venture performance," Journal of International Business Studies, Palgrave Macmillan, vol. 35(3), pages 201-215, May.
    7. Steven W. Floyd, 1997. "Middle Management's Strategic Influence and Organizational Performance," Journal of Management Studies, Wiley Blackwell, vol. 34(3), pages 465-485, 05.
    8. Mudambi, Ram & Swift, Tim, 2009. "Professional guilds, tension and knowledge management," Research Policy, Elsevier, vol. 38(5), pages 736-745, June.
    9. Kaufmann, Lutz & Roessing, Soenke, 2005. "Managing conflict of interests between headquarters and their subsidiaries regarding technology transfer to emerging markets--a framework," Journal of World Business, Elsevier, vol. 40(3), pages 235-253, August.
    10. Au, Kevin Y. & Fukuda, John, 2002. "Boundary spanning behaviors of expatriates," Journal of World Business, Elsevier, vol. 37(4), pages 285-296, January.
    11. Mudambi, Ram & Swift, Tim, 2011. "Leveraging knowledge and competencies across space: The next frontier in international business," Journal of International Management, Elsevier, vol. 17(3), pages 186-189, September.
    12. Taplin, Ian M., 2006. "Strategic change and organisational restructuring: How managers negotiate change initiatives," Journal of International Management, Elsevier, vol. 12(3), pages 284-301, September.
    13. Robert A. Burgelman, 1983. "Corporate Entrepreneurship and Strategic Management: Insights from a Process Study," Management Science, INFORMS, vol. 29(12), pages 1349-1364, December.
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    Cited by:
    1. Schmid, Stefan & Dzedek, Lars R. & Lehrer, Mark, 2014. "From Rocking the Boat to Wagging the Dog: A Literature Review of Subsidiary Initiative Research and Integrative Framework," Journal of International Management, Elsevier, vol. 20(2), pages 201-218.
    2. Mudambi, Ram & Swift, Tim, 2011. "Leveraging knowledge and competencies across space: The next frontier in international business," Journal of International Management, Elsevier, vol. 17(3), pages 186-189, September.

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