Strategic tensions in multinational corporations during global disruptions

Abstract

Abstract 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 information technology (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 CHQs or regional headquarters (RHQs). 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/value This study presents subsidiaries not as passive receivers of orders from CHQs or RHQs, but as active partners in the corporate management hierarchy capable to mold effectively certain corporate-wide initiatives and policies.

Keywords: Headquarters–subsidiary roles and relation, Subsidiary strategies, Bounded reliability ,Strategy processes