A Lighter Shade of Dark : Exploring the Value Adding and Value Subtracting Effects of Headquarters Attention and Involvement in Subsidiary Activities

Sammanfattning: Headquarters of multinational corporations are presented with a diverse range of stimuli that influences the issues that they pay attention to and ultimately get involved in. However, headquarters have to prioritize since their attention and resources are limited, and they cannot pay attention to all issues and get equally involved in all subsidiaries. To stand out and attract attention and involvement, subsidiaries can use different issue selling tactics to present headquarters with issues that are strategically important to the subsidiary. While headquarters can add value to their subsidiaries by paying attention and getting involved in subsidiary activities, there is also a risk of headquarters making different prioritizations than the subsidiaries, and instead subjecting them to misguided involvement and value subtraction. Existing research tends to assume that the more attention a subsidiary receives, the better off it will be. However, I reevaluate this assumption, and complement existing research by examining how subsidiaries experience headquarters attention and involvement, and the effects on subsidiary activities.Data were collected at the subsidiary level, using interviews and a survey to capture the subsidiary perspective of headquarters attention and involvement. More specifically, 115 interviews were conducted with subsidiary managers of European MNCs based in Japan, and survey data was collected from 93 Japanese subsidiaries of European MNCs. The empirical findings highlight circumstances under which headquarters attention and involvement can add or subtract value from subsidiary activities. Furthermore, subsidiaries can highlight strategic issues during their issue selling efforts to attract headquarters involvement that has a beneficial impact on subsidiary activities. I extend the parenting literature by developing an attention-based parenting typology and showing how misaligned priorities risk exposing subsidiaries to value subtraction rather than value added during headquarters involvement. This thesis also contributes to elaborating on the attention-based view by exploring mixed types and levels of attention, as well as circumstances under which negative attention can be perceived as beneficial and value adding by subsidiaries.By incorporating the attention-based view with the parenting literature and issue selling, this thesis extends our understanding of the headquarters-subsidiary relationship, highlights circumstances under which subsidiaries appreciate attention and involvement, and shows a darker side of headquarters’ parenting in which subsidiaries risk experiencing value subtraction.