Mnc Organizational Form and Subsidiary Motivation Problems: Controlling

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Journal of International Management 18 (2012) 247–259 Contents lists available at SciVerse ScienceDirect Journal of International Management MNC organizational form and subsidiary motivation problems: Controlling intervention hazards in the network MNC Kirsten Foss a, b, Nicolai J. Foss a, b, Phillip C. Nell b,⁎ a b Department of Strategy and Management, Norwegian School of Economics and Business Administration, Breiviksveien 40; N-5045; Bergen, Norway Department of Strategic Management and Globalization, Copenhagen Business School, Kilevej 14, 2nd floor, 2000 Frederiksberg, Denmark a r t i c l e i n f o a b s t r a c t The MNC literature treats the (parent) HQ as entirely benevolent with respect to their perceived and actual intentions when they intervene at lower levels of the MNC. However, HQ may intervene in subsidiaries in ways that demotivate subsidiary employees and managers (and therefore harm value creation). This may happen even if such intervention is benevolent in its intentions. We argue that the movement away from more traditional hierarchical forms of the MNC and towards network MNCs placed in more dynamic environments gives rise to more occasions for potentially harmful intervention by HQ. Network MNCs should therefore be particularly careful to anticipate and take precautions against “intervention hazards.” Following earlier research, we point to the role of normative integration and procedural justice, but argue that they also serve to control harmful HQ intervention (and not just subsidiary opportunism). © 2012 Elsevier Inc. All rights reserved. Available online 8 May 2012 Keywords: The network MNC MNC HQ Managerial intervention and opportunism Normative integration Procedural justice 1. Introduction In the extant literature on the multinational corporation (MNC), the parent headquarters (HQ) plays a wholly benevolent

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