Enter the Dragon : Toward a Micro-political View on Subsidiary Initiatives

Sammanfattning: Subsidiary initiatives are proactive, entrepreneurial activities that arise locally without central directives or planning from headquarters. Prior research suggests that subsidiary initiatives are crucial to multinational corporations’ (MNCs) success in foreign locations as they hold the potential to enhance local responsiveness, worldwide learning, and global integration by the leveraging of new knowledge. However, subsidiary-driven initiatives are often met with resistance in the corporate structure, by virtue of headquarters’ limited capacity to pay attention to all stimuli, initiative misalignment to the MNC, or overall self-interest-seeking behavior. Against this background, the MNC is conceptualized as a ‘politicized forum’ where subsidiary managers strategize initiatives upwards. Consequently, a micro-political process emerges from subsidiary managers’ proactive activities. The purpose of this thesis is to investigate the role of micro-politics play in earning headquarters approval of subsidiary initiatives and how these actions may lead to increased subsidiary influence in the MNC.The empirical material consists of proprietary survey and interview data on MNC subsidiaries in Sweden. The primary respondents and informants have been top subsidiary managers, seen as the senior directors of the subsidiary and the MNCs’ top representatives in the local environment. The empirical findings, triangulated through different methodological approaches, illustrate subsidiary initiatives as complex phenomenon. The study implies that headquarters’ approval of subsidiary initiatives is contingent on several key managerial activities, as well as relational- and contextual conditions. Overall, the results lend support for the value of attracting headquarters’ attention in order for initiatives to gain traction and eventually become accepted in the MNC. Attention to initiatives is captivated by the socio-political navigation of subsidiary managers, such as their engagement in initiative-selling. Establishing credibility at headquarters through attention-building activities may also result in increased subsidiary strategic influence.This thesis shows that initiatives that challenge the status quo of the MNC may initially be rejected, but are able to ‘survive’ due to a variety of micro-political behaviors of individual managers. Furthermore, the thesis also explicates different combinatory effects on the pathways to initiative acceptance. The thesis extends the subsidiary management literature by providing nuance to the theoretical understanding of key underlying mechanisms and their effects on subsidiary-focused outcomes. Establishing subsidiary managers as ‘strategizers’ and conceptualizing the subsidiary initiative process from a micro-political view contributes to the theoretical understanding of subsidiary initiatives in the MNC by complementing traditional evolutionary perspectives.