MNC Organizational Form and Subsidiary Motivation Problems: Controlling Intervention Hazards in the Network MNC

Kirsten Foss, Nicolai Foss, Phillip C. Nell

Publication: Scientific journalJournal articleResearchpeer-review

56 Citations (Scopus)

Abstract

The MNC literature treats the (parent) HQ as entirely benevolent with respect to their perceived and actual intentions when they intervene at lower levels of the MNC. However, HQ may intervene in subsidiaries in ways that demotivate subsidiary employees and managers (and therefore harm value-creation). This may happen even if such intervention is benevolent in its intentions. We argue that the movement away from more traditional hierarchical forms of the MNC and towards network MNCs placed in more dynamic environments gives rise to more occasions for potentially harmful intervention by HQ. Network MNCs should therefore be particularly careful to anticipate and take precautions against "intervention hazards". Following earlier research, we point to the role of normative integration and procedural justice, but argue that they also serve to control harmful HQ intervention (and not just subsidiary opportunism). (authors' abstract)
Original languageEnglish
Pages (from-to)247 - 259
JournalJournal of International Management
Volume18
Issue number3
DOIs
Publication statusPublished - 2012

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