Unravelling Agency Relations inside the MNC: The Roles of Socialization, Goal Conflicts and Second Principals in Headquarters-Subsidiary Relationships

Item Type Journal paper
Abstract

In this paper, we propose and test an agency model for HQ-subsidiary relations. Drawing on classical agency assumptions, we develop a baseline hypothesis that links informal controls (i.e., socialization), HQ-subsidiary goal conflicts, and the HQ’s use of formal controls (i.e., behavioral controls). We subsequently introduce an important boundary condition, which reflects subsidiaries’ internal agency relations with subsidiary CEOs as second principals. More specifically, we argue that the baseline relationship only holds under low levels of second principal power. To test our model, we employed a unique study design with three parallel surveys addressing the
agents and the two principals involved in 131 agency relations within one MNC.

Authors Ambos, Björn; Kunisch, Sven Gunnar Tilo; Leicht-Deobald, Ulrich & Schulte Steinberg, Adrian
Journal or Publication Title Journal of World Business
Language English
Keywords Headquarters-subsidiary relation; Agent relation; Agency theory; Socialization; Organizational control; Goal conflict; Multinational corporation; Principal-agent relation
Subjects business studies
HSG Classification contribution to scientific community
HSG Profile Area SoM - Responsible Corporate Competitiveness (RoCC)
Refereed Yes
Date 2019
Publisher Elsevier Science
Volume 54
Number 2
Page Range 67-81
ISSN 1090-9516
Depositing User Dr. Ulrich Leicht-Deobald
Date Deposited 07 Nov 2018 09:24
Last Modified 02 Jan 2021 01:24
URI: https://www.alexandria.unisg.ch/publications/255617

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Citation

Ambos, Björn; Kunisch, Sven Gunnar Tilo; Leicht-Deobald, Ulrich & Schulte Steinberg, Adrian (2019) Unravelling Agency Relations inside the MNC: The Roles of Socialization, Goal Conflicts and Second Principals in Headquarters-Subsidiary Relationships. Journal of World Business, 54 (2). 67-81. ISSN 1090-9516

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https://www.alexandria.unisg.ch/id/eprint/255617
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