Goal Conflicts and Corporate Control: Implications for Headquarters-Subsidiary Relationships of Multinational Corporations

Item Type Conference or Workshop Item (Paper)
Abstract

When applied in headquarters-subsidiary contexts, agency theory traditionally promotes behavioral vs. output controls for principals (headquarters) to manage their agents (subsidiaries). Existing studies, however, have both theoretically and empirically largely neglected the role of social controls. Two reasons support this: (1) Agency theory as-sumes within-subsidiary homogeneity when it comes to subsidiaries and control strategies, and (2) goal conflicts are not precisely conceptualized. In this study, we acknowledge within-subsidiary heterogeneity and advance a nuanced view on goal conflicts, differentiating between conflicts pushed by central vs. pushed by local units. Examining 131 function-specific dyads between a headquarters and its six subsidiaries of a European MNC, we find the distinction of goal conflicts to matter for the effects of socialization and choice of behavioral vs. output control strategies.

Authors Schulte Steinberg, Adrian; Kunisch, Sven & Ambos, Björn
Language English
Keywords Agency theory, corporate control, goal conflicts, headquarters-subsidiary relationships
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date 30 May 2015
Publisher Strategic Management Society
Page Range 1-7
Number of Pages 7
Event Title 2015 SMS Strategic Management Society Special Conference
Event Location St.Gallen
Event Dates 28.-20.05.2015
Depositing User Adrian Schulte Steinberg
Date Deposited 27 Apr 2015 11:12
Last Modified 26 Jan 2018 15:24
URI: https://www.alexandria.unisg.ch/publications/240731

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Citation

Schulte Steinberg, Adrian; Kunisch, Sven & Ambos, Björn: Goal Conflicts and Corporate Control: Implications for Headquarters-Subsidiary Relationships of Multinational Corporations. 2015. - 2015 SMS Strategic Management Society Special Conference. - St.Gallen.

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https://www.alexandria.unisg.ch/id/eprint/240731
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