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.
Österreichische Systematik der Wissenschaftszweige (ÖFOS)
- 509018 Wissensmanagement
- 505027 Verwaltungslehre
- 502052 Betriebswirtschaftslehre
- 506009 Organisationstheorie
- 502044 Unternehmensführung
- 507026 Wirtschaftsgeographie