Goal Conflicts in the Headquarters-Subsidiary Relationship: Corporate Control Effects and Implications

Item Type Conference or Workshop Item (Paper)
Abstract

Although agency theory is a prominent perspective to investigate behavioral and outcome control in relationships between headquarters and subsidiaries with conflicting goals, the role of social control has largely been overlooked. Yet socialization can be a potent driver for reducing goal conflicts and hence agency problems. In this study, we theoretically advance and empirically test this basic hypothesis and the underlying mechanisms of socialization in their effect on goal conflicts, and subsequently other corporate controls. To do so, we look into bilateral relationships between central functions and their local counterparts, and distinguish between conflicts pushed by central vs. pushed by local units. Examining 131 agency relationships inside a headquarters and its six subsidiaries of a European MNC, we find the distinction of goal conflicts to matter for the use of corporate control strategies.

Authors Schulte Steinberg, Adrian; Kunisch, Sven & Ambos, Björn
Language English
Keywords Agency theory, goal conflict, headuqarters-subsidiary relationship
Subjects business studies
HSG Classification contribution to scientific community
HSG Profile Area SoM - Responsible Corporate Competitiveness (RoCC)
Refereed Yes
Date 19 March 2015
Publisher Strategic Management Society
Page Range 1-7
Number of Pages 7
Event Title 2015 SMS Strategic Management Society Special Conference
Event Location Santiago de Chile
Event Dates 19.-21.03.2015
Depositing User Adrian Schulte Steinberg
Date Deposited 27 Apr 2015 11:06
Last Modified 26 Jan 2018 15:12
URI: https://www.alexandria.unisg.ch/publications/240729

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Citation

Schulte Steinberg, Adrian; Kunisch, Sven & Ambos, Björn: Goal Conflicts in the Headquarters-Subsidiary Relationship: Corporate Control Effects and Implications. 2015. - 2015 SMS Strategic Management Society Special Conference. - Santiago de Chile.

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https://www.alexandria.unisg.ch/id/eprint/240729
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