IDEAS home Printed from https://ideas.repec.org/a/sae/revmar/v2y2010i1p101-134.html
   My bibliography  Save this article

Headquarters–Subsidiary Relationships during Dramatic Strategic Changes—The Local Implementation of a Global Merger between MNCs in India

Author

Listed:
  • Roger Schweizer

    (Roger Schweizer is Assistant Professor, Department of Business Administration, School of Business, Economics and Law, University of Gothenburg, Göteborg, Sweden. E-mail: Roger.Schweizer@mgmt.gu.se)

Abstract

This article, using an in-depth single case study approach, studies the local integration process between two globally merging multinational companies’ (MNCs) subsidiaries in India. The focus is on the interplay between the parent company and the subsidiary level during the local implementation of such a global strategic decision. The article shows that the parent company does not in detail coordinate and control the local implementation due to (a) an in-beforehand strictly defined framework and (b) the existing vacuum in MNC internal values and norms. The article further suggests that the strategic importance of a subsidiary’s market is positively and the degree of perceived resemblance between the parent’s home country and the subsidiary’s local environment is negatively related to the degree of parental involvement. Finally, the article suggests that subsidiaries’ reactions towards parental involvement are influenced by: (a) the type of involvement/coordination mechanisms used, (b) the local institutional environment and (c) the relational context.

Suggested Citation

  • Roger Schweizer, 2010. "Headquarters–Subsidiary Relationships during Dramatic Strategic Changes—The Local Implementation of a Global Merger between MNCs in India," Review of Market Integration, India Development Foundation, vol. 2(1), pages 101-134, April.
    • Handle: RePEc:sae:revmar:v:2:y:2010:i:1:p:101-134
    DOI: 10.1177/097492921000200107
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/097492921000200107
    Download Restriction: no
    File URL: https://libkey.io/10.1177/097492921000200107?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Birkinshaw, Julian & Holm, Ulf & Thilenius, Peter & Arvidsson, Niklas, 2000. "Consequences of perception gaps in the headquarters-subsidiary relationship," International Business Review, Elsevier, vol. 9(3), pages 321-344, June.
    2. Yves Doz & C. K. Prahalad, 1993. "Managing DMNCs: A Search for a New Paradigm," Palgrave Macmillan Books, in: Sumantra Ghoshal & D. Eleanor Westney (ed.), Organization Theory and the Multinational Corporation, chapter 2, pages 24-50, Palgrave Macmillan.
    3. Jon I Martinez & J Carlos Jarillo, 1989. "The Evolution of Research on Coordination Mechanisms in Multinational Corporations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 20(3), pages 489-514, September.
    4. Sumantra Ghoshal & D. Eleanor Westney, 1993. "Introduction and Overview," Palgrave Macmillan Books, in: Sumantra Ghoshal & D. Eleanor Westney (ed.), Organization Theory and the Multinational Corporation, chapter 1, pages 1-23, Palgrave Macmillan.
    5. Schmidt, Sascha & Rühli, Edwin, 2002. "Prior Strategy Processes as a Key to Understanding Mega-mergers:: The Novartis Case," European Management Journal, Elsevier, vol. 20(3), pages 223-234, June.
    6. D. Eleanor Westney, 1993. "Institutionalization Theory and the Multinational Corporation," Palgrave Macmillan Books, in: Sumantra Ghoshal & D. Eleanor Westney (ed.), Organization Theory and the Multinational Corporation, chapter 3, pages 53-76, Palgrave Macmillan.
    7. Phillip M Rosenzweig & Nitin Nohria, 1994. "Influences on Human Resource Management Practices in Multinational Corporations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 229-251, June.
    8. Zaheer, Srilata & Schomaker, Margaret & Genc, Mehmet, 2003. "Identity Versus Culture in Mergers of Equals," European Management Journal, Elsevier, vol. 21(2), pages 185-191, April.
    9. Dubois, Anna & Gadde, Lars-Erik, 2002. "Systematic combining: an abductive approach to case research," Journal of Business Research, Elsevier, vol. 55(7), pages 553-560, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. à sta Dís Óladóttir, 2010. "Integrative Capacity as a Moving Force in Newly Formed Icelandic Multinational Enterprises," Review of Market Integration, India Development Foundation, vol. 2(1), pages 135-172, April.
    2. Persson, Magnus, 2006. "The impact of operational structure, lateral integrative mechanisms and control mechanisms on intra-MNE knowledge transfer," International Business Review, Elsevier, vol. 15(5), pages 547-569, October.
    3. Andersson, Ulf & Forsgren, Mats, 1996. "Subsidiary embeddedness and control in the multinational corporation," International Business Review, Elsevier, vol. 5(5), pages 487-508, October.
    4. Eduardo Ortas & Isabel Gallego‐Álvarez & Igor Álvarez, 2019. "National institutions, stakeholder engagement, and firms' environmental, social, and governance performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(3), pages 598-611, May.
    5. Gelbuda, Modestas & Meyer, Klaus E. & Delios, Andrew, 2008. "International business and institutional development in Central and Eastern Europe," Journal of International Management, Elsevier, vol. 14(1), pages 1-11, March.
    6. Outila, Virpi & Mihailova, Irina & Reiche, B. Sebastian & Piekkari, Rebecca, 2020. "A communicative perspective on the trust-control link in Russia," Journal of World Business, Elsevier, vol. 55(6).
    7. Ruth V. Aguilera & Valentina Marano & Ilir Haxhi, 2019. "International corporate governance: A review and opportunities for future research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 457-498, June.
    8. Schotter, Andreas & Beamish, Paul W., 2011. "Performance effects of MNC headquarters-subsidiary conflict and the role of boundary spanners: The case of headquarter initiative rejection," Journal of International Management, Elsevier, vol. 17(3), pages 243-259, September.
    9. Fortwengel, Johann & Jackson, Gregory, 2016. "Legitimizing the apprenticeship practice in a distant environment: Institutional entrepreneurship through inter-organizational networks," Journal of World Business, Elsevier, vol. 51(6), pages 895-909.
    10. Zeng, Rong & Grøgaard, Birgitte & Steel, Piers, 2018. "Complements or substitutes? A meta-analysis of the role of integration mechanisms for knowledge transfer in the MNE network," Journal of World Business, Elsevier, vol. 53(4), pages 415-432.
    11. Dörrenbächer, Christoph, 2002. "National business systems and the international transfer of industrial models in multinational corporations: Some remarks on heterogeneity," Discussion Papers, Research Unit: Organization and Employment FS I 02-102, WZB Berlin Social Science Center.
    12. Kurokawa, Sam & Iwata, Satoshi & Roberts, Edward B., 2007. "Global R&D activities of Japanese MNCs in the US: A triangulation approach," Research Policy, Elsevier, vol. 36(1), pages 3-36, February.
    13. Reiche, B. Sebastian, 2008. "The configuration of employee retention practices in multinational corporations' foreign subsidiaries," International Business Review, Elsevier, vol. 17(6), pages 676-687, December.
    14. Chung, Chris Changwha & Beamish, Paul W., 2005. "Investment mode strategy and expatriate strategy during times of economic crisis," Journal of International Management, Elsevier, vol. 11(3), pages 331-355, September.
    15. Anthony Ferner & Jacques Bélanger & Olga Tregaskis & Michael Morley & Javier Quintanilla, 2013. "U.S. Multinationals and the Control of Subsidiary Employment Policies," ILR Review, Cornell University, ILR School, vol. 66(3), pages 645-669, May.
    16. Wolf, Joachim, 2002. "Strategic orientation and coordination of human resource management in multinational corporations: An information-processing and gestalt analysis," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 553, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    17. Zhang, Hongjuan & Young, Michael N. & Tan, Justin & Sun, Weizheng, 2018. "How Chinese companies deal with a legitimacy imbalance when acquiring firms from developed economies," Journal of World Business, Elsevier, vol. 53(5), pages 752-767.
    18. Ignacio Cretini & Marcelo Delfini & Alejandra Quadrana, 2021. "Determinantes de la autonomía local en la gestión del trabajo en empresas multinacionales. El caso de las subsidiarias argentinas," Ensayos de Economía 19346, Universidad Nacional de Colombia Sede Medellín.
    19. Rickley, Marketa & Karim, Samina, 2018. "Managing institutional distance: Examining how firm-specific advantages impact foreign subsidiary CEO staffing," Journal of World Business, Elsevier, vol. 53(5), pages 740-751.
    20. repec:dau:papers:123456789/2093 is not listed on IDEAS
    21. Maria Adenfelt & Katarina Lagerström, 2008. "The development and sharing of knowledge by Centres of Excellence and transnational teams: A conceptual framework," Management International Review, Springer, vol. 48(3), pages 319-338, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:revmar:v:2:y:2010:i:1:p:101-134. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.idfresearch.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.