Rights statement: The final publication is available at Springer via http://dx.doi.org/10.1057/s41267-017-0122-8
Accepted author manuscript, 830 KB, PDF document
Available under license: CC BY-NC: Creative Commons Attribution-NonCommercial 4.0 International License
Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
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 -