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Subsidiary power in multinational corporations: the subtle role of micro-political bargaining power

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Purpose ‐ As subsidiary power has received relatively little attention in existing research, this paper aims to enhance the understanding of genuine sources of subsidiary power and how they work in headquarters-subsidiary relationships. Design/methodology/approach ‐ The paper is based on a review of the relevant literature and four illustrative case studies, which are written on the basis of secondary sources. Each case was selected because it adequately represents a particular type of power. This allows for cross-case comparisons of the strengths and sustainability of different types of power, and facilitates the exploration of the application of subsidiary power in headquarters-subsidiary relationships. Findings ‐ Four genuine types of subsidiary power are identified. One of these ‐ micro-political bargaining power ‐ plays a subtle but crucial role, as it is important in the enactment of the three other types of power, i.e. systemic, resource-dependency, and institutional. Practical implications ‐ As headquarters have unlimited access to formal power, subsidiaries find it necessary to constantly apply micro-political bargaining power. The empirical material suggests that the effectiveness of micro-political bargaining power for subsidiary actors is based on two factors: information retrieval from headquarters and the leveraging of such information in issue-selling or conflict-handling processes. Originality/value ‐ The paper contributes by theoretically delineating genuine types of subsidiary power and by illustrating the strength, sustainability and interaction of these types of power in headquarters-subsidiary relationships.

Keywords: Intergroup relations; Politics; Subsidiaries

Document Type: Research Article


Publication date: February 1, 2011

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