Christoph Dörrenbächer

Subsidiary power in multinational corporations: the subtle role of micro‐political bargaining power

Purpose – As 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/approach – The 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.Findings – Four 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 implications – As headq...

Measuring corporate internationalisation: A review of measurement concepts and their use

Measures of corporate internationalisation have gained crucial importance in the recent debate on globalisation, since many scholars link globalisation to a quantitative increase in the international activities of firms. Opinions on the extent of this increase differ widely, however, depending on what measurement concept is used. As there is no universally applicable measurement concept, researchers face the difficult task of bringing research questions, measurement concepts and data availability into line.

Managerial Risk-taking in International Acquisitions in the Brewery Industry: Institutional and Ownership Influences Compared

This paper deals with the role that institutional differences play in managerial risk‐taking when firms engage in international acquisitions. It is assumed that multinational corporations (MNCs) have different interests and capabilities when dealing with international acquisition, which in the authors’ view are significantly shaped by specific home country institutional influences. This study concerns the question of how different forms of ownership – concentrated (e.g. family and bank based) and dispersed (stock market based) – influence risk‐taking and managerial decision‐making in large international acquisitions. Comparing a total of 12 large acquisitions of four leading MNCs in the global brewery industry, the paper shows that mutually reinforcing influences of country of origin (coordinated vs liberal market economies) and ownership (family ownership vs stock market ownership) lead to different risk profiles and managerial risk‐taking with regard to international acquisitions.

Intrafirm Competition in Multinational Corporations: Towards a Political Framework:

Intrafirm competition is one of the most contentious issues in multinational companies (MNCs). It occurs when different subsidiaries of an MNC overlap with regard to products, markets or technologies and headquarters try to make use of this overlap by coercive comparisons. It also occurs when a subsidiary takes an initiative that challenges an existing mandate of another subsidiary. Despite the large potential for conflict in intrafirm competition, neither the literature on intrafirm competition nor the more extensive literature on subsidiary mandate change has paid systematic attention to the political dimension of intrafirm competition. Therefore, a political framework to study intrafirm competition is developed in this paper, drawing on classical organisational politics approaches. The focus of this framework is on core actors in intrafirm competition, i.e. headquarters and subsidiary executives, their interest-based strategies, and their interaction in micro-political games evolving around intrafirm competition.

Subsidiary staffing and initiative-taking in multinational corporations: A socio-political perspective

Purpose – This paper seeks to explore the personal motives of subsidiary CEOs in taking initiatives in multinational corporations. In essence, the paper proposes that subsidiary initiative‐taking is strongly driven by the socio‐political positioning of subsidiary CEOs, which consists of specific “social aspects” that account for the basic orientation that subsidiary CEOs maintain in initiative‐taking, as well as “political aspects” that affect the ability of subsidiary CEOs to strategize and the ways they do it in the highly politicized processes of initiative‐taking.Design/methodology/approach – The paper is based on four exploratory case studies undertaken in German subsidiaries in France. Applying a matched pair approach it compares two subsidiaries run by parent country nationals (PCNs) with two subsidiaries run by host country nationals (HCNs).Findings – The paper demonstrates that the nationality of the subsidiary CEO alone does not explain subsidiary CEOs initiative‐taking behaviour. Other factors ...

The internationalization of corporate research and development

Foreign direct investment has grown rapidly in recent decades and, along with it, foreign research and development activities. The following article analyzes the reasons for the internationalization of R&D, examines its patterns in relationship to Germany and discusses the implications for future policy.

Subsidiary Initiative Taking in Multinational Corporations: The Relationship between Power and Issue Selling

This paper investigates the political maneuvering that accompanies subsidiary initiative taking in multinational corporations. 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 headquarters–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 second-rank power in subsidiary initiative taking, as it only works in conjunction with subsidiary power.

Politics and Power in the Multinational Corporation: Politics and power in the multinational corporation: an introduction

The current financial and economic crisis has negatively underlined the vital role of multinational corporations (MNCs) in our daily lives. The breakdown and crisis of flagship MNCs, such as Enron, WorldCom, Lehman Brothers, Toyota and General Motors, does not merely reveal the problems of corporate malfeasance and market dysfunction but also raises important questions, both for the public and the academic community, about the use and misuse of power by MNCs in the wider society, as well as the exercise of power by key actors within internationally operating firms. Given these and previous similar developments, it is surprising that questions about organizational power and politics have not had a more central role in the study of the MNC. Historically, research on the MNC was focused on studying the influence and changing role of headquarters (HQ) management (e.g. Stopford and Wells 1972; Vernon 1966), with, for example, Hymer (1970) actually predicting that more geographical dispersion of MNCs would lead to greater concentration of decision-making power at the center. As long as HQ management was seen in the driving seat, the role of lower level managers, e.g. in local subsidiaries, and of other employees was mainly reduced to adaptation either to centrally set strategies or to external environmental pressures. Later, studies on the “evolution” of the MNC stressed that MNCs can hardly be managed top-down, especially if “diversification” and internationalization are increasing, but they did not “dare” shed more light on power relations and organizational politics.

The futures of critical perspectives on international business

Purpose – The purpose of this extended editorial is to elaborate on the possible future trajectories of critical perspectives on international business. In addition, the content of the current issue is introduced.Design/methodology/approach – This editorial reviews recent reflections on the field of international business to identify the concerns of mainstream scholars and to contrast these with those of central concern to critical scholars of international business. In the light of this, consideration is given to how critical perspectives on international business seeks to facilitate the development of academic debates that continue to question orthodox approaches to international business whilst also offering relevance for all stakeholders in international business activities from managers, shareholders and policy makers to workers, consumers and citizens, including future generations.Findings – Taking stock of recent reflections on the future of the field of international business is useful in determin...

Micro-political Games in the Multinational Corporation: The Case of Mandate Change

Micro-political conflicts associated with corporate internationalization have been neglected by and large in the literature so far. Despite early consideration by the behavioral theory of internationalization, the specific strength of a micro-political approach, i.e. combining actors’ idiosyncratic action with structural and institutional constraints, remained more or less unused in studies on corporate internationalization. Screening the relevant literature, discussing the strengths of micro-political approaches and proposing mandate changes in multinational corporations as an particularly interesting empirical field, the paper also outlines for some directions for further research into the micro-politics of multinational corporations.