Subsidiary Integration as Identity Construction and Institution Building: A Political Sensemaking Approach

Abstract

This paper develops a political sensemaking approach to the post-acquisition integration process, which directs attention to how powerful social actors construct the relationship between multinational corporations (MNCs) and their multiple local contexts. This political, processual and actor-centred perspective explores subsidiary integration as identity construction and institution building. The different characteristics that local and head office managers attribute to the subsidiary establish diverse interests in and political stances towards it and, through actions to resolve these differences, senior decision makers shape the subsidiary’s strategic and structural location in the MNC. We illustrate this argumentation with reference to post-socialist acquisitions by Western multinationals, whose contrasting institutional and management experiences put the problem of multiple contexts and subsidiary integration into sharp relief. This approach complements mainstream international business research by attending directly to the neglected processual nature of subsidiary integration and examining different socio-political dynamics resulting from sensemaking and sensegiving interactions between key actors in the MNC

The Process of Postmerger Integration: A Review and Agenda for Future Research

“…Notwithstanding the broader literature on power and politics in organizations (e.g., Eisenhardt & Bourgeois, 1988;Pfeffer & Moore, 1980;Clegg, Courpasson & Phillips, 2006), extant work has only scratched the surface of politics in PMI (Vaara, 2003;Tienari & Vaara, 2012). Prior work suggests that socio-political factors affect interactions between key actors in PMI (e.g., Clark & Geppert, 2011), and that PMI may be linked with broader cultural or societal power relationships and political processes (Hellgren et al, 2002;Tienari, Vaara & Björkman, 2003;Tienari et al, 2005). However, it is notable that current work has mainly focused on the causes and consequences of conflicts in the post-acquisition company.…”

Power in Management and Organization Science

“…Subectification 'over' organizations as a site of power might be useful for understanding this phenomenon too. For example, Clark and Geppert (2011) emphasize this form of power in their investigation of the way a post-Soviet organization merged into a Western MNC context. Given the divergence of cultural values between the two organizations, the researcher's note how a new set of 'sense making' protocols were produced in order for Western commercial values to become internalized by employees.…”

Interpretive Frames as the Organization’s “Mirror”: From Espoused Values to Social Integration in MNEs

“…While cultural differences may indeed create challenges as organizations strive to achieve social integration (Björkman et al 2007), the use of shared values has been recognized as an effective mechanism to "glue" networks of differentiated foreign subsidiaries together (Clark and Geppert 2011;Nohria and Ghoshal 1994;Persson 2006). National cultures are furthermore often compatible with a diverse range of values, suggesting that local adaptations of values can be successful even if they do not mirror the most common local practices (d 'Iribarne 2012a'Iribarne , 2012b).…”

“…Several integration mechanisms have been identified and studied extensively over the past decades. While the majority of studies have emphasized the design of formal organizational structures such as standardized processes and centralized decision-making (Keupp et al 2011), the growing recognition that many MNEs operate as differentiated networks has also lead to an increased attention to less formal integration mechanisms such as internal socialization processes (Clark and Geppert 2011). Despite the recognition of numerous integration mechanisms, however, we still have limited insight into how MNEs actually achieve integration (Keupp et al 2011).…”