Kostova, Tatiana, Nell, Phillip C., Hoenen, Anne Kristin. 2016. Understanding Agency Problems in Headquarters-Subsidiary Relationships in Multinational Corporations: A contextualized Model. Journal of Management (JOM).
BibTeX
Abstract
This paper proposes an agency model for headquarters-subsidiary relationships in multinational organizations with headquarters as the principal and the subsidiary as the agent. As a departure from classical agency theory, our model is developed for the unit level of analysis and considers two root causes of the agency problem—self-interest and bounded rationality. We argue that in the organizational setting, one cannot assume absolute self-interest and perfect rationality of agents (subsidiaries) but should allow them to vary. We explain subsidiary-level variation through a set of internal organizational and external social conditions in which the headquarters-subsidiary agency dyad is embedded. We then discuss several agency scenarios reflecting various levels of self-interest and rationality that lead to different manifestations of the agency problem. The proposed framework can inform more relevant applications of the agency perspective in organizational studies and motivate future research.
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| Status of publication | Published |
|---|---|
| Affiliation | WU |
| Type of publication | Journal article |
| Journal | Journal of Management (JOM) |
| Citation Index | SSCI |
| WU Journalrating 2009 | A |
| WU-Journal-Rating new | FIN-A, INF-A, MAN-A+, STRAT-A, WH-A |
| Language | English |
| Title | Understanding Agency Problems in Headquarters-Subsidiary Relationships in Multinational Corporations: A contextualized Model. |
| Year | 2016 |
| Reviewed? | Y |
| DOI | http://dx.doi.org/10.1177/0149206316648383 |
| Open Access | Y |
Associations
- People
- Nell, Phillip C. (Details)
- Hoenen, Anne Kristin (Former researcher)
- External
- Kostova, Tatiana (University of South Carolina, United States/USA)
- Organization
- Department of Global Business and Trade DP (Details)
- Institute for International Business IN (Details)
- Institute for International Business (Nell) (Details)
- Research areas (ÖSTAT Classification 'Statistik Austria')
- 2965 Knowledge management (Details)
- 5234 Administrative science (Details)
- 5307 Business and management economics (Details)
- 5324 Organizational research (Details)
- 5333 Business management (Details)
- 5915 Economic geography (Details)