Headquarters Of Multinational Corporations Research Articles

Improving subsidiary performance via inpatriate assignments: The role of host country national subsidiary CEOs’ social ties and motivational cultural intelligence

Inpatriation experience (i.e., working at headquarters) for host-country national (HCN) subsidiary managers is supposed to be beneficial for foreign subsidiaries’ knowledge transfer and financial performance. Applying upper echelons theory, we investigate whether HCN subsidiary CEOs with inpatriation experience promote knowledge transfer from multinational corporation (MNC) headquarters to their subsidiaries via the formation of social ties at MNC headquarters to drive subsidiary performance. Moreover, we theorize and investigate if HCN subsidiary CEOs’ motivational cultural intelligence can amplify the positive effect of inpatriation experience. Combining survey and archival data from 289 subsidiaries of MNCs in South Korea, our results partially support our theoretical model. Our findings offer important implications for expatriate staffing, inpatriation assignments, and subsidiary management.

“A thread connects all beads”: Aligning global CSR strategy by hotel MNCs

Facing the global challenges of building a sustainable and equitable economy, hotel multinational corporations (MNCs) have leveraged their extensive global reach and business skills to guide local communities through the implementation of global corporate social responsibility (CSR) strategies. Our study explored the alignment of global CSR strategy by two hotel MNCs—Hilton Worldwide and Marriott International—using an institutional logics framework. Based on a two-country case study of China and Turkey, we uncover the mechanisms of implementation for alignment between MNC headquarters and affiliated hotels in host countries, where a plurality of logics interact and collide with the global CSR logic. We examine the dimensions of plurality of logics in the process of local implementation and unveil novel insights on logic reconciliation and activation to support systemic and transformative change through global CSR strategies of MNCs. We offer theoretical and practical implications and future research directions. • This study examined global integration of a CSR strategy in two hotel multinational corporations in China and Turkey. • Novel mechanisms enabled alignment between headquarters and local hotels for CSR in the context of a plurality of institutional logics. • Corporate logic dominated community and state logic in global strategic alignment of CSR. • Local implementation tensions and facilitators were identified for supporting headquarters mechanisms. • Hospitality logic facilitated strategic alignment, improving the potential of the MNCs to create awareness and impact.

Proximity at a distance: The relationship between foreign subsidiary co-location and MNC headquarters board interlock formation

Corporations seek various relationships, such as board interlocks, with other firms to reduce resource dependencies. The consistent theoretical expectation and empirical finding that physical proximity is an important driver for board interlock formation is seemingly at odds with the emerging and growing literature on transnational board interlock ties. We argue that the effect of proximity on multinational corporation (MNC) board interlock formation can also be attributed to the firms’ internationalization strategy, namely, when they have co-located subsidiaries in foreign markets. We call this “proximity at a distance”. We test our assumptions on a dataset covering almost 43,000 board interlocks among MNC headquarters and their 12 million subsidiary co-location pairs. We confirm that proximity among headquarters increases the odds of interlocking but also find robust evidence that co-located subsidiaries also increase firms’ propensity to interlock, particularly for transnational board interlocks. Our results help provide an explanation for the “paradox of distance” by showing that the interlock between two distant MNCs may be driven by proximity to their foreign subsidiaries. As such, we illustrate how MNCs’ resource-dependent strategic responses can occur at the headquarters level to address uncertainties experienced at the subsidiary level.

Discussion of: The State Expropriation Risk and the Pricing of Foreign Earnings

Discussion of: The State Expropriation Risk and the Pricing of Foreign Earnings

The spatial pattern of MNCs headquarters in the context of developmental state: The case of Beijing

The spatial pattern of multinational corporations (MNC)’ headquarters (HQs) plays an essential role in the organization of a world city. Triggered by strategies to decentralize non-capital function from the core area, the recent restructuring of the Beijing metropolitan is particularly concerning. By bridging the theory of paradigm of world cities and industry spatial agglomeration, this study provides an institutional perspective for estimating the spatial pattern of HQs in the context of a globalized economy and developmental states. We implement dynamic spatial analysis and Geographically Weighted Poisson Regression on a data set of HQs of different capital forms: central state-owned enterprises (CSOE), non-central state-owned enterprises (non-CSOE), private enterprises (PE), and foreign enterprises (FE). The findings are: 1) The dominant part of HQs tend to concentrate in the central area of Beijing metropolitan despite suburbanization, while only FEs show certain decentralization pattern; 2) A hierarchy of spatial centralization was found, from CSOEs to non-CSOEs, and then PEs and FEs, which is an exact reflection of institutional orders; 3) Only CSOEs are likely to locate approximately to central ministries, while the agglomeration of other HQ types is strongly influenced by the grouping of advanced producer services, indicating the synchronicity of state-public MNC alliance and MNC-capital networks. This makes Beijing a distinct state-centered political—bureaucratic world city mixed with certain features of market-centered bourgeois world cities. It is necessary to account for the administrative cost when considering a relocation of headquarters out of the Beijing metropolitan.

Holding On While Letting Go: Neocolonialism as Organizational Identity Work in a Multinational Corporation

This paper develops the idea of neocolonialism as organizational identity work in multinational corporations (MNCs). We argue that neocolonialism – the ethos and practice of colonialism and western superiority in contemporary society – is a means through which identity is worked on at MNC headquarters (HQ). In contrast to extant neocolonial studies of western MNCs, which focus on the subsidiaries (the colonized) and how their identities are shaped by the HQ (the colonizer), we analyse how the HQ is shaped by the subsidiaries. We elucidate two versions of neocolonialism at play: a traditional neocolonial ethos, which prevails at HQ, and a more contemporary version, which is silenced. Our findings show that nurturing a shared and enduring organizational identity across all units of an MNC is a quixotic task. Nevertheless, HQ managers in western MNCs keep attempting to do this, suggesting that neocolonial ethos and practice continue to be relevant in these organizations.

An Empirical Analysis on the Determinants of Foreign Subsidiary’s Local Embeddedness: Focusing on Korean MNCs in China

The purpose of this paper is to empirically analyze the determinants of foreign subsidiary's local embeddedness because it is critically important for the subsidiary to build a variegated local network. This paper suggests that a MNC's global capability, the degree of autonomy granted by the headquarters of the multinational corporation to its foreign subsidiary, the foreign subsidiary's absorptive capacity based on local environment, and its level of localization will affect the subsidiary's local network embeddedness. The empirical analysis confirmed that when the headquarters gives the foreign subsidiary more autonomy, this has a positive effect on the local embeddedness of the foreign subsidiary and when the foreign subsidiary has a strong absorptive capacity, this has a positive correlation with the local embeddedness of the foreign subsidiary. And this paper found that when the foreign subsidiary has achieved a high level of staff localization, this foreign subsidiary will have a higher level of local embeddedness. This study identified the preceding conditions necessary for a foreign subsidiary of a multinational corporation to effectively embed itself in the local network by analyzing factors related to the multinational corporation's headquarters and subsidiaries, and thus contributes significantly to continued research on the local embeddedness of subsidiaries.

Transnational business feminism: Exporting feminism in the global economy

Business feminism is a brand of feminism that privileges women's advancement in the corporate hierarchy and centres corporations as the ultimate purveyors of gender equity. While scholars have critiqued this formulation, little empirical research has analysed the processes that guide the dissemination and translation of business feminism in organizational settings within global corporate networks. This article advances scholarship on the global processes that drive the export of business feminism logics. We analyse the process of dissemination of business feminism from the headquarters of multinational corporations to corporate hubs located in Hungary. This process relies on women executives who are charged with translating policies and practices originating in the headquarters of western corporations. In‐depth interviews with women executives charged with implementing corporate policies reveal the ways in which business feminism is interpreted, modified and/or resisted by actors within organizational settings.

Headquarters involvement, socialization, and entrepreneurial behaviors in MNC subsidiaries

Headquarters of multinational corporations can be involved in their subsidiaries and help with the development and transfer of innovative ideas. However, headquarters involvement might not always be desired or needed, and it can thus be perceived as interference with local activities, potentially reducing local willingness to go the extra mile. We address the lack of knowledge about subsidiary manager behavior by answering the following question: How does headquarters involvement influence the proactive behavior of subsidiary managers to push for new and innovative ideas? Using data from 120 top managers in subsidiaries of multinational corporations, we find that the negative relationship between headquarters involvement and their subsidiary managers' support for initiatives can be reduced when socialization mechanisms such as a common corporate culture or rotation programs are put in place.

Reconceptualising Hierarchies: The Disaggregation and Dispersion of Headquarters in Multinational Corporations

AbstractIn this paper, we provide an introduction to the Special Issue entitled ‘Divide and Rule? The Emergence and Implications of Increasingly Disaggregated and Dispersed Headquarters Activities in Contemporary Firms’. The purpose is two‐fold. First, we propose a conceptualization of headquarters activities as a dynamic system in which activities can be distributed organizationally and spatially. We explicitly break with the dominant view of the prior research on ‘the headquarters’ as a single, identifiable unit in one specific location. Second, building on the manuscripts accepted for publication in this Special Issue, we outline research implications and put forward an agenda for research on the emergence and continuous management of disaggregated and dispersed headquarters systems.

Multinational headquarter control of wholly owned foreign subsidiaries

This paper examines how contingent factors, important for wholly owned foreign subsidiary operation, affect the management control system exercised by multinational corporation headquarters. We focus on two sets of contingent factors: first, strategic factors relating to corporate and competitive strategy; and second, factors related to integration internal and external to a multinational corporation. We apply a control archetype approach to more comprehensively consider the controls exercised, relative to extant literature. Our evidence is based on data from a cross-sectional survey completed by 159 Australian multinational corporation headquarters. Our findings indicate activity sharing corporate strategies, low cost competitive strategies, and higher internal integration, lead to greater degrees of control of wholly owned foreign subsidiaries. Differentiation based competitive strategies and external integration have less substantial and narrower implications on the degree of control exercised. These findings are robust to sensitivity tests and are consistent with our expectations that headquarters exercise a higher degree of control in contexts perceived as less problematic.

Managing Human Resources in China: The View from Inside Multinationals, by Yu Zheng. Cambridge: Cambridge University Press, 2013. xx+287 pp. US$110.00 (cloth), US$49.99 (paper), US$36.00 (eBook).

<i>Managing Human Resources in China: The View from Inside Multinationals</i>, by Yu Zheng. Cambridge: Cambridge University Press, 2013. xx+287 pp. US$110.00 (cloth), US$49.99 (paper), US$36.00 (eBook).

The Association between Viability Related Factors and Control Package Choices in the Context of Foreign Subsidiaries

This paper examines the implications of factors relevant to the ongoing viability of wholly owned foreign subsidiary operations on the management control choices exercised by multinational corporation headquarters. We focus on two areas important for wholly owned foreign subsidiary viability, first strategic factors, relating to both corporate and competitive positions, and second integration factors, relating to both foreign subsidiary integration within and outside a multinational corporation. The motivation for this study is based on the continued importance of wholly owned foreign subsidiaries and the associated challenged when controlling these entities. To develop a more comprehensive and holistic understanding of the implications of viability related factors, we apply a control package approach, building on the findings of prior literature. Our evidence is based on a cross sectional survey questionnaire we develop and administer for which we received 159 useable responses. Based on transaction cost economics theory, we hypothesise that viability related factors effect control package choices and in particular effect the greater use of all control packages to a greater extent in situations that are less problematic (low uncertainty, asset specificity and ex-post information asymmetry). Our findings indicate that activity sharing corporate strategies, low cost strategies and higher corporate embeddedness do affect the greater use control packages in many cases, consistent with expectations. However differentiation based competitive strategies and external embeddedness appear to have far more distinct and narrow implications on control package choices. A number of alternative regression modelling approaches are run, however the main continuous variable based regression model results, presented in this paper, appear be explain control packages choices to the greatest extent.

An investigation of wholly‐owned foreign subsidiary control through transaction cost economics theory

AbstractThis paper investigates the management control systems used by multinational corporation headquarters to control wholly‐owned foreign subsidiaries. Our theory development is based on transaction cost economics. First, we conduct a series of exploratory interviews, providing an insight into the context, and second, we provide empirical evidence based on cross‐sectional survey data. Our results indicate that activity traits (uncertainty, asset specificity and post hoc information impactedness) have significant implications on control choices, in particular the control archetype combinations chosen by headquarters, although not all results are consistent with theory predictions. Our findings are supported by extensive alternative testing.

Managing internal competition in multinational corporations: the role of home bases

This paper investigates the role of home bases in the management of internal competition. Prior research has not focussed on the possibility that the headquarters of multinational corporations can encourage internal competition and cooperation by making home bases participate in both or either of these activities. To verify this possibility, this paper first classifies home bases into three categories: home competitor, home coordinator, and home coopetitor. Next, case studies were conducted to clarify the role of home bases in each category. As a result, this paper finds that home bases can encourage internal competition by serving as competitors who have accumulated unique knowledge of improving their performance. This paper also finds that home bases can encourage knowledge sharing among subunits by serving as coordinators who exploit knowledge about activities of foreign units and trusting relationships with foreign units. Lastly, the characteristics of each category are examined.

Organizational structure and knowledge-practice diffusion in the MNC

Purpose– This study aims to examine the interaction of formal and informal cross-border knowledge-sharing practices of four large multinational corporations (MNCs) in aerospace, software, IT services and telecommunications industries. The goal was to determine the manner in which coordination and control mechanisms facilitated knowledge transfer.Design/methodology/approach– Case studies comprised secondary data and semi-structured interviews with corporate headquarters and subsidiary managers in large MNCs conducted in the USA, Canada, Mexico, China, India and Eastern Europe.Findings– The primary finding of this study is that knowledge transfer mechanisms arise as a result of both formal and informal structures of the MNC. Formal structures which create either mutual dependencies or occasions for knowledge exchange facilitate transfer. Formal structure which inhibits knowledge transfer can be overcome by knowledge brokers and evaluation metrics.Research limitations/implications– These findings suggest that knowledge transfer is more informal than formal, but that MNC headquarters does play a role, intended or not, through shaping the interdependencies among geographically distributed units. Managers should be mindful of both the manner in which tasks and the organization are structured, as these have an indirect impact on the development of knowledge channels.Originality/value– This paper investigates the role of organizational structure and its effect, both intended and unintended, on the transfer of knowledge-based practices. While knowledge transfer has been heavily researched, this study examines the phenomenon at a finer-grained level of analysis.

Formal Structure and Knowledge Diffusion in the MNC

Purpose – This study examines the interaction of formal and informal cross-border knowledge sharing practices of four large multinational corporations (MNCs) in aerospace, software, IT services, and telecommunications industries. The goal was to determine the manner in which coordination and control mechanisms facilitated knowledge transfer.Design/methodology/approach – Case studies comprised of secondary data and semi-structured interviews with corporate headquarters and subsidiary managers in large multinational companies conducted in the United States, Canada, Mexico, China, India and Eastern Europe.Findings – The primary finding of this study is that knowledge transfer mechanisms arise as a result of both formal and informal structure of the MNC. Formal structures which create either mutual dependencies or occasions for knowledge exchange facilitate transfer. Formal structure which inhibits knowledge transfer can be overcome by knowledge brokers and evaluation metrics.Research limitations/implications – These findings suggest that knowledge transfer is more informal than formal, but that MNC headquarters does play a role, intended or not, through shaping the interdependencies amongst geographically distributed units. Managers should be mindful of both the manner in which tasks and the organization are structured as these have an indirect impact on the development of knowledge channels.Originality/value – This paper investigates the role of organizational structure and its effect, both intended and unintended, on the transfer of knowledge-based practices. While knowledge transfer has been heavily researched, this study examines the phenomenon at a finer-grained level of analysis.

Self-determination of Corporate Sustainability Initiatives in Multinational Subsidiaries

Multinational Corporations (MNC) subsidiaries implement corporate sustainability initiatives (CSIs) if they are self- determined to do so (based on intrinsic motivation) or when urged on by circumstances and pressures (based on extrinsic motivation). Such differences in self-determination are derived from underlying corporate psychological needs for competence, autonomy and relatedness; and are manifested in the governance choices of making, allying or buying CSIs. In this study of oil and gas MNC subsidiaries in the developing country context of Trinidad and Tobago, four distinct types of firms are identified based on their levels of self-determination and corporate governance tendencies. These groups are identified as Trail Blazers, Marching Soldiers, Sharp Shooters, and Fire Fighters; and their distinctive characteristics are described. These findings are useful to corporate sustainability strategists seeking to select, design and implement CSIs that satisfy MNC headquarters directives but balance subsidiary objectives of maintaining good relations and access to operate in developing countries.

Subsidiary absorptive capacity and knowledge transfer within multinational corporations

The paper reviews extant literature on subsidiary absorptive capacity and knowledge transfer within multinational corporations (MNCs), and proposes an agenda for future research on the relationship between these two constructs. It suggests that motivation should be viewed as a moderating factor between subsidiary absorptive capacity and MNC knowledge transfer, and that future research should make a clear distinction between the choices of MNC headquarters and those of subsidiaries regarding knowledge transfer. The paper proposes that a more comprehensive, multi-level framework and dynamic model of the determinants of subsidiary absorptive capacity and MNC knowledge transfer be developed in future studies.

Evolution of Innovation Networks across Geographical and Organizational Boundaries: A Study of R&amp;D Subsidiaries in the Bangalore IT Cluster

In this paper, we investigate the evolution of multinational corporation (MNC) research and development (R&amp;D) subsidiaries through evolution of innovation networks. Their evolution within and outside MNC R&amp;D subsidiaries has not been investigated in the context of MNCs that source innovation from emerging economies. We do so, using two dimensions: geographical and organizational boundaries. In order to identify a pattern, we chose the information technology (IT) cluster in Bangalore, India, as the context for a qualitative study; for there are MNC subsidiaries that operate and innovate within and outside organizational boundaries, and have strong links with firms within and outside of Bangalore cluster. The globalized nature of the cluster helps us infer the evolution of innovation networks by taking a knowledge flow perspective. We identify four distinct phases based on where and how knowledge flows. We find that the innovation networks of these MNC subsidiaries in emerging economies first develop as hierarchical networks and then extend to the local markets. Within the first part, the networks start with a non‐local nature (phase A) and get embedded into local networks (phase B and phase C), finally developing into non‐local (phase D) market ties that enable MNC headquarters to source innovation from the host country. In an emerging economy context, clusters can serve as a springboard by providing a local environment that can help overcome institutional voids.