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How does context matter for headquarter-subsidiary relations of emerging market multinationals? Advancing the contextual view of agency

SITE (Science, Innovation, Technology, and Entrepreneurship)

Speaker:Rekha Rao-Nicholson , University of Essex
Date: Wednesday 27 November 2019
Time: 10:30
Location: Streatham Court B

Further details

We advance the contextual agency perspective of headquarter-subsidiary relations and investigate how emerging market multinationals (EMNEs) vary levels of subsidiary monitoring and autonomy depending on host country political risk with a mixed-methods study. Our quantitative analysis suggests that greater host country political risk is associated with higher subsidiary autonomy and that greater political risk on its own as well as combined with stronger local ties is associated with lower monitoring by headquarters, while our qualitative analysis generates additional evidence that host country context matters. Our study supports the view that EMNEs do not have the same capacity for global coordination as traditional multinationals. We advance four control strategies associated with a context of high/low political risks and stronger/weaker stakeholder ties: collaboration, intervention, delegation, and centralization.