Now showing 1 - 3 of 3
  • Publication
    Parenting Advantage in the MNC : An Embeddedness Perspective on the Value Added by Headuarters
    (Wiley, 2013-09)
    Nell, Philipp
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    What determines the value an MNC's headquarters adds to its own affiliates? In this paper, we shed light on this question by linking the embeddedness view of the multinational corporation to the literature on parenting advantage. We test our hypotheses on an original dataset of 124 manufacturing subsidiaries located in Europe. Our results indicate that the external embeddedness of the MNC is an antecedent to headquarters' value creation. We find that headquarters' investments into their own relationships with the subsidiaries' contexts are positively related to the value added by headquarters. Furthermore, this relationship is stronger when the subsidiary itself is strongly embedded. We discuss implications for the MNC literature, embeddedness research, and the literature on parenting and headquarters' roles.
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    Scopus© Citations 126
  • Publication
    Goal Conflicts and Corporate Control: Implications for Headquarters-Subsidiary Relationships of Multinational Corporations
    (Strategic Management Society, 2015-05-30) ; ;
    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.
  • Publication
    Principal-Agent Multiplicity in Headquarters-Subsidiary Relationships of Multinational Corporations
    (Strategic Management Society, 2015-05-30) ; ;
    The relationship between headquarters and subsidiaries has been the focus of many studies applying diverse theories. A common yet somewhat dormant perspective is agency theory, which views headquarters as principals and subsidiaries as agents. While this perspective has facilitated analyses on e.g., subsidiary-specific control strategies, it falls short in recognizing the complexities found in contemporary MNCs. It is argued that agency relationships are not limited to the ones between headquarters and subsidiary top managers, but can be found on many levels. We build on the traditional notion, and theoretically advance it by allowing for internal units inside headquarters and subsidiaries. As a consequence, we find multiple agency relationships, as well as multiple principals to the same agent. Theoretical implications are discussed and propositions put forward.