Previous studies of organizing-costs in multinational corporations have taken the view of the parent corporation. In this study, we turn the table around and examine how subsidiaries experience organizing-costs as they deal with demands from and interactions with corporate headquarters. Specifically, we examine how distance, coordination mechanisms, and atmosphere influence the level of organizing-costs in the headquarter-subsidiary relationship. We focus on two types of organizing-costs; bargaining costs and information costs. Using survey data collected among subsidiary managers in two Norwegian companies in the consulting and certification services industry, we show that business atmosphere significantly reduces both types of organizing-costs, whereas distance increases bargaining costs. Organizing-costs are also influenced by the coordination mechanisms used in the headquartersubsidiary relationship. We find that centralization and formalization reduce information costs, whereas social integration, contrary to our hypothesis, increases bargaining costs.