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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.

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.

Suggested Citation

  • Schotter, Andreas & Beamish, Paul W., 2011. "Performance effects of MNC headquarters-subsidiary conflict and the role of boundary spanners: The case of headquarter initiative rejection," Journal of International Management, Elsevier, vol. 17(3), pages 243-259, September.
  • Handle: RePEc:eee:intman:v:17:y:2011:i:3:p:243-259
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    6. 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.
    7. 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.
    8. Manuel Hensmans & Guangyan Liu, 2016. "How do the normativity of headquarters and the knowledge autonomy of subsidiaries co-evolve?," iCite Working Papers WP2016-020, ULB -- Universite Libre de Bruxelles.
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    11. repec:bla:jomstd:v:54:y:2017:i:8:p:1170-1205 is not listed on IDEAS
    12. Randi Lunnan & Youzhen Zhao, 2014. "Regional headquarters in China: Role in MNE knowledge transfer," Asia Pacific Journal of Management, Springer, vol. 31(2), pages 397-422, June.
    13. Lee, Ji-Hwan & Roberts, Michael J.D., 2015. "International returnees as outside directors: A catalyst for strategic adaptation under institutional pressure," International Business Review, Elsevier, vol. 24(4), pages 594-604.
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