Intermediate units in multinational corporations: A resource dependency view on coordinative versus entrepreneurial roles

Abstract

Due to the dispersion of headquarters’ activities across organizational and geographical boundaries, intermediate units (IUs) are emerging as a key actor of international business. IUs are intermediate structural layers between headquarters (HQ) and local subsidiaries with specific HQ responsibilities. Our study relies on original data of 67 IUs and, taking on a Resource Dependence approach, explores empirically the two HQ roles attributed to IUs: coordinative versus entrepreneurial. According to our results, the main differences between both roles relate to external network embeddedness, internal network position and autonomy. We argue that these differences arise from the dominant sources of power in each role. These findings have significant relevance for theory development and managerial practice as we provide a starting point for understanding the dispersion of complex HQ systems as well as how those systems are discharged and add value.