Parenting Advantage in the MNC: An Embeddedness Perspective on the Value Added by Headquarters

Nell, Phillip Christopher; Ambos, Björn

doi:10.2139/ssrn.2050359

Cited by 19 publications

(25 citation statements)

References 78 publications

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“…It is also likely that managers in the corporate HQ act as boundary spanners, making connections between internal subsidiary units and linking up with external actors such as government bodies and prospective customers, with a view to increasing the effectiveness of the networked MNC as a whole. While the discussion on the roles and value added functions of HQ has recently gained momentum (Baaij and Slangen, 2013;Baaij et al, 2012;Campbell et al, 2014;Kunisch et al, 2014;Menz et al, 2015;Nell and Ambos, 2013), there has not yet been explicit attention given to what specific boundary spanning activities HQ executives might undertake.…”

Section: Introductionmentioning

confidence: 99%

Boundary Spanning Activities of Corporate HQ Executives Insights from a Longitudinal Study

Birkinshaw

Ambos

Bouquet

2017

J Management Studies

100

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What are the boundary spanning activities undertaken by the Corporate Headquarters (HQ) executives of a Multinational Corporation? We address this question through a five‐year longitudinal case study of one company as it shifted from a traditional HQ in one location, to a dual HQ in two locations, to a virtual HQ split across multiple locations. By observing how HQ executives prioritized their time over the course of this transition, we identified four generic boundary spanning activities: two (spearheading and facilitating) focused on making connections across boundaries, two (reconciling and lubricating) focused on overcoming differences in worldview across boundaries. By considering these activities together, and how they vary in importance over time, we show how each boundary spanning activity adds value to the MNC and improves the effectiveness of the internal and external network. An important feature of our study is that we operationalize boundary spanning at the activity level, i.e., in terms of the specific actions taken by corporate HQ executives, to provide a more granular understanding of how boundary spanning works in practice.

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Section: Introductionmentioning

confidence: 99%

Boundary Spanning Activities of Corporate HQ Executives Insights from a Longitudinal Study

Birkinshaw

Ambos

Bouquet

2017

J Management Studies

100

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“…Our results also have implications for the corporate HQ roles (e.g., Collis, Young, & Goold, 2007;Foss, 1997;Goold & Campbell, 1998;Nell & Ambos, 2013) and procedural justice literatures (Kim & Mauborgne, 1991, 1993 in the context of the MNC. The former focuses on cases in which HQ activities create value for the firm.…”

Section: Contributions To the Global Strategy Literaturementioning

confidence: 61%

The role of procedural justice for global strategy and subsidiary initiatives

Asmussen

Foss

Nell

2019

Global Strategy Journal

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Research Summary The global strategy literature highlights the role of headquarters (HQ) in realizing global integration benefits while enabling independent subsidiary strategic initiatives. We construct a game‐theoretic model of the interaction between HQ and subsidiaries, and, building on procedural justice theory, we analyze the motivational costs that can result from the anticipation or realization of HQ intervention in subsidiary initiatives. We also analyze the implications for MNC‐level value creation when HQ managers, fearing subsidiary managers’ emotion‐based reactions, refrain from intervening. We derive a number of counter‐intuitive results, for example, that good HQ behavior may involve forgoing opportunities for value creation, and that procedural justice systems may sometimes be counterproductive. Managerial Summary Headquarters (HQ) in multinational corporations are required to balance global integration and local autonomy within the organization. This balancing act sometimes requires HQ to intervene in subsidiary matters and to overrule the subunits’ decisions. While an intervention might create integration advantages, it may also have a negative impact on the motivation of subsidiary managers, who might feel that their effort and their decisions are overruled. We focus on such motivational issues and investigate how fair decision‐making processes applied by the HQ influence subsidiaries’ entrepreneurial behavior and their reactions to the overruling. Our findings show that, under specific conditions, HQ need to forgo value‐creating interventions, and that a strong focus on a procedural justice culture within the firm can be detrimental.

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“…The value of the central office-or, more specifically, how the HQ adds value to its constituent units-has been a topic of much research interest in management (Campbell et al, 1995;Foss, 1997). In the context of the MNC, Nell and Ambos (2013) recently highlighted the need for more research into how the HQ behaves and how its activities are organized, emphasizing that in situations of low value creation by MNC HQ, it might be better to reorganize parenting so that fewer resources are spent on parenting or so that a different unit can take on parenting activities for particular subunits.…”

Section: The Corporate Parent and The Sbs: Matching Parenting To Comentioning

confidence: 99%

“…First, a point of contention in the MNC literature is the extent to which HQ should be involved locally. Some researchers found a negative effect of HQ involvement at the subsidiary level (Ciabuschi et al, 2011), whereas others found a positive effect (Nell & Ambos, 2013). Accordingly, the former have argued that HQs should refrain from embedding themselves locally in situations when doing so seems too costly and leave this to the local subsidiary-particularly in geographically and culturally distant contexts (Andersson, Forsgren, & Holm, 2007).…”

Section: Implications Contributions and Concluding Remarksmentioning

confidence: 99%

“…Using qualitative data from interviews with top management of local subsidiaries in Latin America, as well as some of the SBSs, we offer initial empirical evidence and insight regarding the coevolution among the three actors-HQ, SBS, and LS. Notably, whereas recent research addressing MNC configurations through the rationale of parenting theory (Ciabuschi, Forsgren, & Martín, 2011;Nell & Ambos, 2013) analyzes the parenting advantage that arises from the value added uniquely by HQ, our study addresses the reverse direction: how a HQ can overcome a potential disadvantageous position-or "parenting disadvantage"-that arises from cultural, institutional, or business barriers by using an SBS as a RHQ to govern local units.…”

Section: Introductionmentioning

confidence: 99%

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Co‐parenting through subsidiaries: A model of value creation in the multinational firm

Barber

Villar

Madhok³

2017

Global Strategy Journal

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Research Summary We analyze a novel way to configure and manage multinational networks and propose a model of “co‐parenting,” characterized by the sharing of parenting roles and distribution of responsibilities between two units. We develop our argument around the notion of the springboard subsidiary, an operating subsidiary that assumes headquarters’ functions since it shares greater institutional closeness with both the headquarters’ country as well as with the host region. Based upon qualitative data, our inductive model revolves around three stages: establishment, consolidation, and maturity, each of which reflects distinct roles and loci of decision making among the three actors involved: headquarters, springboard subsidiary, and local subsidiary. Overall, our study sheds distinct light on when and how headquarters add value by matching parenting to context. Managerial Summary In expanding across regions, multinational firms often face a situation where neither the local unit nor the corporate headquarters possesses the competencies to be at the competitive forefront. This article analyzes a model of interregional expansion of multinational firms by using springboard subsidiaries—operating subsidiaries that can serve as a bridge between headquarters and local subsidiaries since they share institutional and business ties with both. We develop a model in which some parenting functions—coordination, control, and knowledge creation—are distributed between headquarters and the springboard subsidiary along an accumulative process of capabilities. By demonstrating how a springboard subsidiary can help align control to context, the model offers a tool for strategic analysis that helps avoid potential value destruction by headquarters.

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Parenting Advantage in the MNC: An Embeddedness Perspective on the Value Added by Headquarters

Cited by 19 publications

References 78 publications

Boundary Spanning Activities of Corporate HQ Executives Insights from a Longitudinal Study

Boundary Spanning Activities of Corporate HQ Executives Insights from a Longitudinal Study

The role of procedural justice for global strategy and subsidiary initiatives

Co‐parenting through subsidiaries: A model of value creation in the multinational firm

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