Strategic tensions in Multinational Corporations during Global Disruptions

Management Research Review. 2023. Vol. 46. No. 10. P. 1350–1363.

Igor Gurkov, Dahms S., Ivan Shchetinin

Purpose

The purpose of this study is to investigate strategic tensions arising between corporate headquarters (CHQs) and a subsidiary during disruptive events.  

Design/methodology/approach

This study adapted a case study approach combined with action research elements in the context of the COVID-19 pandemic. The focal company is an US IT-company operating in Russia.

Findings 

During the COVID-19 pandemic some sectors and industries, such as the IT sector, received a unique impetus for development. At the same time, our subsidiary started to develop and implement a set of measures to explore and exploit nascent business opportunities without waiting for the formal approval of “subsidiary initiatives” by the corporate or regional headquarters. The subsidiary was able to postpone the implementation of corporate-wide projects which it saw as not well suited to the host country market at that time.

Originality

We present subsidiaries not as passive receivers of orders from corporate or regional headquarters, but as active partners in the corporate management hierarchy capable to mold effectively certain corporate-wide initiatives and policies.

Keywords: Headquarters-Subsidiary Roles and Relations, Subsidiary Strategies, bounded reliability, Strategy Processes, Stretch Goals, Роли и отношения между дочерники компаниями и штаб-квартирой, ограниченная надежность, стратегические процессы, напряженные цели