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Governance and the Role of Distance, Coordination, and Relationship Atmosphere in the MNC: a View from the Periphery: A Subsidiary Perspectiveon Organizing Costs in Multinational Corporations: The Roles of Distance, Coordination, and Relationship Atmosphere
BI Norwegian Business School, Norway.
BI Norwegian Business School, Norway.
Mälardalen University, School of Business, Society and Engineering, Industrial Economics and Organisation. (IEO)ORCID iD: 0000-0003-4425-9367
BI Norwegian Business School, Norway.
2016 (English)Conference paper, Published paper (Refereed)
Abstract [en]

Previous studies of organizing costsin 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 headquarter-subsidiary relationship. We find that centralization and formalization reduce information costs, whereas social integration, contrary to our hypothesis, increases bargaining costs.

Place, publisher, year, edition, pages
2016.
Keyword [en]
Headquarter-subsidiary relations, organizing costs, coordination, distance, atmosphere
National Category
Business Administration
Identifiers
URN: urn:nbn:se:mdh:diva-34064OAI: oai:DiVA.org:mdh-34064DiVA, id: diva2:1055781
Conference
42nd Conference of the European International Business Academy (EIBA), December 2-4, 2016, Vienna, Austria.
Available from: 2016-12-13 Created: 2016-12-13 Last updated: 2017-01-03

Open Access in DiVA

fulltext(502 kB)100 downloads
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File name FULLTEXT02.pdfFile size 502 kBChecksum SHA-512
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Type fulltextMimetype application/pdf

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf