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The Interplay between HQ Legitimation and Subsidiary Legitimacy Judgments in HQ Relocation: A Social Psychological Approach

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The Interplay between HQ Legitimation and Subsidiary Legitimacy Judgments in HQ Relocation : A Social Psychological Approach. / Balogun, Julia Christine; Fahy, Kathryn Mary; Vaara, Eero.

In: Journal of International Business Studies, Vol. 50, No. 2, 03.2019, p. 223–249.

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@article{f13b1136d3114b548f638af39446179f,
title = "The Interplay between HQ Legitimation and Subsidiary Legitimacy Judgments in HQ Relocation: A Social Psychological Approach",
abstract = "This paper marks a departure from the focus on external stakeholders in much research on legitimacy and Multinational Corporations, adopting a social psychological approach to study how MNCs build internal legitimacy for controversial decisions with their subsidiaries. We explore this through a longitudinal, real-time qualitative case study of a regional office relocation, since office relocations represent rare yet significant strategic decisions. We analyze the interplay between the legitimation strategies of senior managers and subsidiary legitimacy judgments, based in instrumental, relational, and moral considerations, and how the relationship between the two develops over time. From this analysis we derive inductively a process model that reveals the dynamics of building internal legitimacy with subsidiaries, and how an MNC moves on even in the absence of full legitimacy, when dealing with controversial MNC decisions. The model highlights two important dynamics. The first is a dynamic between legitimation strategies and legitimacy judgments and how this is influenced by local subsidiary contexts. The second is a temporal dynamic in how both the legitimation strategies and legitimacy judgments evolve over time. Our model contributes to research on legitimacy in MNCs, what we know about tensions that characterize MNC sub-unit relationships, and research on headquarters relocation.",
keywords = "headquarters–subsidiary roles and relations , strategic change , qualitative research , case study",
author = "Balogun, {Julia Christine} and Fahy, {Kathryn Mary} and Eero Vaara",
note = "The final publication is available at Springer via http://dx.doi.org/10.1057/s41267-017-0122-8",
year = "2019",
month = "3",
doi = "10.1057/s41267-017-0122-8",
language = "English",
volume = "50",
pages = "223–249",
journal = "Journal of International Business Studies",
issn = "0047-2506",
publisher = "Palgrave Macmillan Ltd.",
number = "2",

}

RIS

TY - JOUR

T1 - The Interplay between HQ Legitimation and Subsidiary Legitimacy Judgments in HQ Relocation

T2 - A Social Psychological Approach

AU - Balogun, Julia Christine

AU - Fahy, Kathryn Mary

AU - Vaara, Eero

N1 - The final publication is available at Springer via http://dx.doi.org/10.1057/s41267-017-0122-8

PY - 2019/3

Y1 - 2019/3

N2 - This paper marks a departure from the focus on external stakeholders in much research on legitimacy and Multinational Corporations, adopting a social psychological approach to study how MNCs build internal legitimacy for controversial decisions with their subsidiaries. We explore this through a longitudinal, real-time qualitative case study of a regional office relocation, since office relocations represent rare yet significant strategic decisions. We analyze the interplay between the legitimation strategies of senior managers and subsidiary legitimacy judgments, based in instrumental, relational, and moral considerations, and how the relationship between the two develops over time. From this analysis we derive inductively a process model that reveals the dynamics of building internal legitimacy with subsidiaries, and how an MNC moves on even in the absence of full legitimacy, when dealing with controversial MNC decisions. The model highlights two important dynamics. The first is a dynamic between legitimation strategies and legitimacy judgments and how this is influenced by local subsidiary contexts. The second is a temporal dynamic in how both the legitimation strategies and legitimacy judgments evolve over time. Our model contributes to research on legitimacy in MNCs, what we know about tensions that characterize MNC sub-unit relationships, and research on headquarters relocation.

AB - This paper marks a departure from the focus on external stakeholders in much research on legitimacy and Multinational Corporations, adopting a social psychological approach to study how MNCs build internal legitimacy for controversial decisions with their subsidiaries. We explore this through a longitudinal, real-time qualitative case study of a regional office relocation, since office relocations represent rare yet significant strategic decisions. We analyze the interplay between the legitimation strategies of senior managers and subsidiary legitimacy judgments, based in instrumental, relational, and moral considerations, and how the relationship between the two develops over time. From this analysis we derive inductively a process model that reveals the dynamics of building internal legitimacy with subsidiaries, and how an MNC moves on even in the absence of full legitimacy, when dealing with controversial MNC decisions. The model highlights two important dynamics. The first is a dynamic between legitimation strategies and legitimacy judgments and how this is influenced by local subsidiary contexts. The second is a temporal dynamic in how both the legitimation strategies and legitimacy judgments evolve over time. Our model contributes to research on legitimacy in MNCs, what we know about tensions that characterize MNC sub-unit relationships, and research on headquarters relocation.

KW - headquarters–subsidiary roles and relations

KW - strategic change

KW - qualitative research

KW - case study

U2 - 10.1057/s41267-017-0122-8

DO - 10.1057/s41267-017-0122-8

M3 - Journal article

VL - 50

SP - 223

EP - 249

JO - Journal of International Business Studies

JF - Journal of International Business Studies

SN - 0047-2506

IS - 2

ER -