The more,the merrier? How a subsidiary's organizational identification with the MNE affects its initiative

How does a subsidiary's organizational identification influence its tendency to demonstrate initiative? In this study, we argue that a subsidiary's organizational identification with the MNE may affect its initiative via two mechanisms: subsidiary motivation and headquarters screening. On the one hand, subsidiary motivation mechanism suggests that a subsidiary's organizational identification with an MNE may affect its tendency to demonstrate initiative. On the other hand, the headquarters screening mechanism maintains that headquarters may rely on organizational identification to support or dismiss the subsidiary's projects. In light of the two mechanisms, we propose that a subsidiary's organizational identification may first increase its initiative, but after a certain point, the effect will diminish, ultimately leading to an inverted U-shaped relation. Building on this central argument, we also examine the boundary conditions at the subsidiary and MNE levels that may shape the proposed effect. Findings based on a sample of Taiwanese MNEs support these arguments. Our findings contribute to the literature by highlighting the role that a subsidiary's organizational identification plays in its initiative.     

制度落差、社会资本与跨国公司海外子公司合法性

组织合法性是制度理论的核心概念,是影响跨国公司海外子公司生存和发展的关键因素.将跨国公司海外子公司的社会资本分为内部社会资本和外部社会资本,将海外子公司合法性划分为内部合法性和外部合法性,分析海外子公司社会资本对其合法性的影响机理,进而揭示制度落差在跨国公司海外子公司社会资本与其合法性关系间的调节作用,提出相应的理论命题,以期拓展组织合法性理论,并为越来越多进行跨国经营的中国企业提供理论参考.     

Headquarters involvement,socialization, and entrepreneurial behaviors in MNC subsidiaries

Headquarters of multinational corporations can be involved in their subsidiaries and help with the development and transfer of innovative ideas. However, headquarters involvement might not always be desired or needed, and it can thus be perceived as interference with local activities, potentially reducing local willingness to go the extra mile. We address the lack of knowledge about subsidiary manager behavior by answering the following question: How does headquarters involvement influence the proactive behavior of subsidiary managers to push for new and innovative ideas? Using data from 120 top managers in subsidiaries of multinational corporations, we find that the negative relationship between headquarters involvement and their subsidiary managers' support for initiatives can be reduced when socialization mechanisms such as a common corporate culture or rotation programs are put in place.     

Strategy restoration

Discussions of strategic change generally assume that managers strive to break free from the constraints of their organization's past so that they can forge ahead into the future. However, some organizations instead opt to reinterpret and reenact abandoned strategies drawn from their own history. Such actions are largely unaccounted for in the literature on strategic change. Accordingly, we propose here a conceptualization of a distinct type of strategic change that we call “strategy restoration.” We first outline how strategy restoration fills a gap in current understandings of strategic change. We then elaborate conditions that motivate and enable organizations to pursue strategy restoration rather than other types of strategic change. Two components of the framework—organizational traditionality and memory—characterize the organization itself, and two—nostalgia and perceptions of the organization's authenticity—characterize the market in which the organization operates. The proposed conceptualization of strategy restoration and discussion of its underlying mechanisms carry implications for researchers and managers.     

The role of ostensive and performative routine aspects in dynamic capability deployment at different organizational levels

This study clarifies how dynamic capabilities work in modifying operational capabilities at different organizational levels. While there is good understanding that routines that make up operational capabilities possess ostensive and performative aspects, whether the same applies to dynamic capabilities is unclear. In addition, there is only a limited understanding of how dynamic capabilities link to operational capabilities in terms of these two routine aspects, in general, and at different organizational levels, in particular. Our findings suggest that ostensive and performative routine aspects explain the way in which dynamic capabilities work in modifying operational capabilities. They also reveal that the pattern of the ostensive or performative routine aspects in dynamic capability deployment at a selected organizational level correspond with that associated with operational capabilities at the same level.     

Structural and contextual approaches to ambidexterity: A meta-analysis of organizational and environmental contingencies

This meta-analysis examines the conditions under which structural and contextual approaches help balance exploration and exploitation. Drawing on heterogeneous samples of prior ambidexterity studies, we apply moderated meta-analytic regression methods to 33,492 organizations sampled in 114 primary studies from 1991 to 2017 to test a contingency model. Our findings suggest that structural separation helps firms of all sizes to balance exploration and exploitation, and that structural separation is more conducive for balancing exploration and exploitation in high technology environments. Also, avoiding a structural separation approach benefits service firms. As research on ambidexterity enters the maturity stage we discuss the implications for future theory development, methodology, and for managers interested in developing ambidextrous organizations.     

Divide and rule: The effects of diversity and network structure on a firm's sustainability performance

To tackle sustainability, firms often use partnerships with organizations from different industries or societal sectors such as government and civil society. While partnerships show potential for firms to improve their sustainability performance, they not only lead to a potential to learn from diversity but also to tensions due to a lack of unity between partners. In partnerships for sustainability, this unity-diversity tension particularly manifests itself in different views of sustainability. This paper examines how this tension affects the sustainability performance of firms taking part in partnerships for sustainability in developing countries. To address this question, this tension is conceptualized as being the result of differences in organizational frames and institutional logics between a focal firm and other organizations in the partnership. It is also taken into consideration that firms are embedded in an overarching, relational network structure that allows them to manage the diversity in frames and logics. To test the hypotheses, the study analyses 1353 greenhouse gas emission reduction projects of 322 firms from developing countries active in the carbon-offset market from 2007 to 2009. The findings show that if partners hold different frames and belong to different sectors, a firm's sustainability performance improves first due to learning from diversity but after a turning point decreases from a lack of unity. This inverse U-shape relationship is flipped if a firm occupies a brokerage position in its network.     

Interactive profit-planning systems and market turbulence: A dynamic capabilities perspective

This article describes, theorizes and empirically investigates the concept of interactive profit-planning systems (PPS) through the lens of the dynamic capabilities logic. With this conceptualization: interactive PPS capabilities comprise budgeting, forecasting and results-reporting routines, in which top and middle managers interact to create knowledge for sensing, seizing, and business model reconfiguring (to manage strategic business change). Survey data from 331 Australian firms is analyzed employing partial least squares structural equation modeling. The data provides support for two hypotheses: (1) greater market turbulence strengthens the positive effect of interactive PPS capabilities on business unit performance; and (2) greater market turbulence strengthens the positive effect of flexibility values (of organizational culture) on interactive PPS capabilities. Our findings show that interactive PPS capabilities function according to the salient tenets of the dynamic capabilities logic, and clarify the beneficial roles of formal cybernetic control systems and the intertwined involvement of top and middle managers in using dynamic capabilities.     

Impact of subsidiaries' cross-border knowledge tacitness shared and social capital on MNCs' explorative and exploitative innovation capability

As subsidiaries' cross-border knowledge increases in tacitness, it becomes more difficult for subsidiaries to articulate and for multinational corporations' (MNCs') headquarters to integrate and apply. Herein, dynamic capabilities and social capital theory frame structural and relational social capital as capabilities that improve the productivity of subsidiaries' cross-border knowledge tacitness shared on MNCs' headquarters explorative and exploitative innovation capability. The hypotheses are tested on a data set consisting of survey data collected from 220 senior managers or executives at the headquarters of Taiwan-based MNCs. Interestingly, structural social capital between headquarters and subsidiaries strengthens the negative association between subsidiaries' cross-border knowledge tacitness shared and explorative innovation capability; relational social capital attenuates the negative association between subsidiaries' cross-border knowledge tacitness shared and both explorative and exploitative innovation capability. Stated differently, different types of social capital can facilitate (i.e., relational social capital) or impede (i.e., structural social capital) innovation capability when cross-border knowledge tacitness is high. The validity and managerial implications of these findings are explored through interviews with senior managers or executives of MNCs headquarters or subsidiaries. Theoretically, this study emphasizes the importance of understanding relationships between subsidiaries and MNCs' headquarters to understand the association between subsidiaries' resources and MNCs' headquarters innovation capability.