Published online by Cambridge University Press: 26 April 2011
Introduction
Headquarters and subsidiaries are the two generic organizational units that form multinational corporations (MNCs). Their specific relationship is of central importance, as conflicts in these relationships threaten the effectiveness, or even the operations, of MNCs. Reasons for conflicts in headquarters–subsidiary relationships are manifold. They range from differing perceptions of business opportunities (see e.g. Schmid and Daniel in this volume) to the introduction of corporate-wide standards (see e.g. Fenton-O'Creevy et al. in this volume). In particular, conflict potential can be linked to headquarters-driven charter losses, i.e. an active move by headquarters to withdraw a charter from a particular subsidiary.
Headquarters-driven charter losses in subsidiaries are typically an outcome of headquarters redefining the strategic mission of the MNC. One example is the implementation of a rationalization strategy, in which some production plants are to be closed and production capacities are reallocated to other subsidiaries. Another occurs when a subsidiary loses its charter because the parent company downgrades the importance of the host country market. These charter reallocations are likely to increase competition among subsidiaries and, for the “losers,” a conflicting relationship with the parent company is likely to arise (e.g. Blazejewski 2009; Dörrenbächer and Becker-Ritterspach 2009). However, little is known about what causes conflicting interests in charter losses between headquarters and subsidiaries to turn into an open conflict, nor is much known about the role of headquarters' and subsidiaries' agency.
This chapter addresses this research gap using the case of a German MNC in the telecommunications equipment industry (Siemens).
To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
Find out more about the Kindle Personal Document Service.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.