Sowing the seeds of subsidiary influence: Social navigating and political maneuvering of subsidiary actors

• Author: Kieran M. Conroy,Johanna Clancy,David G. Collings
• DOI: http://doi.org/10.1002/gsj.1323
• Date: 01 November 2019
• Published date: 01 November 2019

RESEARCH ARTICLE

Sowing the seeds of subsidiary influence: Social

navigating and political maneuvering of subsidiary

actors

Kieran M. Conroy

1

| David G. Collings

2

| Johanna Clancy

3

1

Queen's Management School, Queen's University

Belfast, Belfast, U.K.

2

Human Resource Management, Leadership &

Talent Institute, DCU Business School, Dublin

City University, Dublin 9, Ireland

3

J. E. Cairnes School of Business & Economics,

National University of Ireland, Galway, Ireland

Correspondence

David G. Collings, Professor of Human Resource

Management, Leadership & Talent Institute, DCU

Business School, Dublin City University,

Glasnevin, Dublin 9, Ireland.

Email: david.collings@dcu.ie

Research Summary:This paper emphasizes the social

and political dimensions of subsidiary influence in strate-

gically repositioning the subsidiary's mandate. The spe-

cific skills subsidiary actors deploy in attempting to

influence corporate headquarters have largely been

neglected in existing literature. Drawing from a micro-

political perspective, we provide a more nuanced, fine-

grained understanding of subsidiary influence by illumi-

nating how influence is augmented and enriched through

the concomitant effects of subsidiary actors' social and

political skills. Using a multiple case study analysis and

drawing on qualitative interviews, we illustrate how sub-

sidiary actors' social skills are used to continuously create,

maintain, and develop spaces of social engagement with

corporate decision makers, whereas political skill involves

the ability to leverage social spaces by developing specific

influence tactics such as targeting, showcasing, and

framing.

Managerial Summary:Subsidiaries of multinational

companies play an increasingly dominant role in the

global business environment. The role of the individual

subsidiary actor in influencing corporate management is

crucial to the development of the subsidiary mandate.

Despite this, very little is known about the microlevel

skills individual subsidiary actors draw upon to influence

the development of their mandates. This article explores

how subsidiary actors channel key social and political

skills in strategically repositioning their mandates within

the multinational enterprise. We find that subsidiary actors

may use their social skills to establish increased interac-

tion and communication with key corporate decision

makers, whereas political skill is used to develop a variety

of influence tactics.

Received: 15 August 2017 Revised: 15 May 2018 Accepted: 1 June 2018

DOI: 10.1002/gsj.1323

502 © 2018 Strategic Management Society Global Strategy Journal. 2019;9:502–526.wileyonlinelibrary.com/journal/gsj

KEYWORDS

mandate repositioning, micro-politics, social and

political skill, subsidiary influence

1|INTRODUCTION

Multinational enterprises (MNEs) are characterized by continually shifting structures, often driven by

global and local conflicts of power between corporate headquarters (HQ) and foreign subsidiaries

(Ambos, Asakawa, & Ambos, 2011; Clegg, Geppert, & Hollinshead, 2018; Geppert, Becker-Ritter-

spach, & Mudambi, 2016). The corporate HQ's aspiration to exert greater control and coordination is

continuously countered or challenged by the subsidiary's interest in achieving auxiliary levels of

autonomy and influence (Dorrenbacher & Gammelgaard, 2016; Forsgren, Holm, & Johanson, 2005;

Narula, 2014). Contemporary changes in MNE structural design, from hierarchical to network-based

architectures, create opportunities and challenges for a subsidiary's mandate, and they manifest in

investment or relocation decisions (Andersson, Forsgren, & Holm, 2007). This is a strategic problem

for subsidiaries, in that subsidiary actors that are not seeking to consistently develop influence over

their corporate HQ during these changes may risk mandate divestment or strategic isolation

(Monteiro, Arvidsson, & Birkinshaw, 2008). Despite extant research acknowledging that the position

of the subsidiary is largely dependent on the influence it cultivates over corporate HQ (Asakawa,

Park, Song, & Kim, 2017; Conroy & Collings, 2016; Garcia-Pont, Canales, & Noboa, 2009; Yamin &

Andersson, 2011), our understanding of the specific mechanisms through which key actors in the

subsidiary gain and maintain influence over the corporate HQ during mandate change remains lim-

ited. As such, greater consideration of subsidiary influence as a continuous activity that is frequently

contested over time, rather than incidentally established in defined periods of bargaining or negotia-

tion, is needed (Dorrenbacher & Gammelgaard, 2006; Najafi-Tavani, Giroud, & Andersson, 2014).

Taking the perspective of the MNE as a political arena captures a central problem for subsidiaries,

in that any influence the subsidiary develops is continuously in flux and not easily sustained, as other

powerful and influential actors attempt to cultivate favorable positions of their own (Clegg et al.,

2018). Recent research has argued that the architectural shift from a hierarchical to a network-based

MNE has set the scene for a “high-stakes”political contestation between the corporate HQ and for-

eign subsidiaries in a bid to preserve or develop influence (Egelhoff & Wolf, 2017; Levy & Reiche,

2017). More specifically, MNEs are populated by individual actors who have diverse political objec-

tives formed through a multitude of social interactions (Harvey & Novicevic, 2004; Kostova & Roth,

2003; Morgan & Kristensen, 2006). In this sense, the concept of subsidiary influence has remained

largely “faceless”in explaining how significant transitional exchanges in the corporate HQ-

subsidiary relationship represent a global political game dominated by ongoing microlevel interac-

tions from key actors at the subsidiary level (Forsgren et al., 2005; Kristensen & Zeitlin, 2005;

O'Brien, Sharkey Scott, Andersson, Ambos, & Fu, 2018). In particular, shifting structures in the form

of mandate change create “contested social spaces”within the MNE, leading to increasingly intense

social and political interactions between powerful actors seeking to establish greater influence

(Dorrenbacher & Gammelgaard, 2016; Geppert & Dorrenbacher, 2014). These social and political

interactions create further opportunities for individual actors to leverage and channel particular skills

CONROY ET AL.503