Abstract
The allocation of HQ resources to entrepreneurial initiatives in subsidiaries is crucial to their realization. However, such allocation does not always follow rational decision making, and corporations potentially forego important opportunities while financing unpromising ones. I investigate biases of senior headquarters managers in the allocation of financial resources to subsidiary initiatives, as well as consequences of organizational and human resource allocation on the operational management practices of MNC subsidiaries. My doctoral research further entails important methodological findings regarding survey methods used in my dissertation and their implications for practitioners and academics relying on the insights published in the top IB journals.
Highlights
In my first dissertation essay, I seek to understand the influence of heuristic cues related to the subsidiary and the individual championing the initiatives and ask: What affect does being a local or expatriate have on being a champion of a subsidiary initiative? How does overall perceived host country distance moderate such effect and influence the allocation of financial resources by HQ managers to subsidiary initiatives?
The allocation of financial resources to entrepreneurial initiatives in subsidiaries of multinational corporations is crucial to their realization
Participants were asked to take the role of a senior manager at HQ. They had to make a PhD awarded by WU Vienna University of Economics and Business, Austria (May 2020) Dissertation title: Headquarters Resource Allocation within Multinational Corporations: Antecedents, Consequences and Related Methodological Issues
Summary
Did you know that as an expatriate you might both benefit and be penalized by headquarters (HQ) managers’ biases in the resource allocation process and that the effect of such biases is moderated by the subsidiary location? How about that the environment where your HQ is located influences management practices in your subsidiary factories all over the world and that not all HQ resources where your multinational corporation (MNC) makes big investments are improving the transfer of the “best practices”? My research brings a few more interesting and intriguing findings while generally seeking to answer the big question: How do HQ manager biases to the subsidiary manager (given the location) affect HQ resource allocation, and what is the consequence of HQ resource allocation on subunit level management practices?
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