This paper investigates the political maneuvering that accompanies subsidiary initiative taking in multinational corporations (MNCs). On the basis of an explorative empirical investigation of subsidiary initiative taking in the French subsidiaries of six German MNCs, the paper explores the activities that subsidiaries undertake to sell their initiatives, and the relationships among issue selling, subsidiary power and headquarters' hierarchical power. The findings suggest that the use of issue-selling tactics is common when subsidiaries engage in initiative taking. In addition, the paper demonstrates that a low degree of issue selling is needed to obtain approval of an initiative in less asymmetrical headquarter-subsidiary power relationships (i.e. relationships in which subsidiaries are relatively powerful). In cases where power relationships are highly asymmetrical, issue selling is a necessity, but it is hardly a sufficient condition for obtaining headquarters' approval. This renders issue selling to a secondrank power in subsidiary initiative taking, as it only works in conjunction with subsidiary power.
PurposeAs subsidiary power has received relatively little attention in existing research, this paper aims to enhance the understanding of genuine sources of subsidiary power and how they work in headquarters‐subsidiary relationships.Design/methodology/approachThe paper is based on a review of the relevant literature and four illustrative case studies, which are written on the basis of secondary sources. Each case was selected because it adequately represents a particular type of power. This allows for cross‐case comparisons of the strengths and sustainability of different types of power, and facilitates the exploration of the application of subsidiary power in headquarters‐subsidiary relationships.FindingsFour genuine types of subsidiary power are identified. One of these – micro‐political bargaining power – plays a subtle but crucial role, as it is important in the enactment of the three other types of power, i.e. systemic, resource‐dependency, and institutional.Practical implicationsAs headquarters have unlimited access to formal power, subsidiaries find it necessary to constantly apply micro‐political bargaining power. The empirical material suggests that the effectiveness of micro‐political bargaining power for subsidiary actors is based on two factors: information retrieval from headquarters and the leveraging of such information in issue‐selling or conflict‐handling processes.Originality/valueThe paper contributes by theoretically delineating genuine types of subsidiary power and by illustrating the strength, sustainability and interaction of these types of power in headquarters‐subsidiary relationships.
Previous discussions of knowledge transfer within multinational corporations tended to focus on the process as an isolated phenomenon and on the factors that impede the process. Less attention has been given to how the individual knowledge worker retrieves or identifies, and then decodes knowledge accessed from the corporate memory. We suggest that multinational companies (MNCs) solve knowledge retrieval problems by implementing virtual communities of practice-intranet-based collaborative forums. Codification and personalization strategies have previously been emphasized as an either-or solution. These virtual communities of practice combine the codification and personalization strategies, simultaneously utilizing the advantages of two approaches.
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