Dominators or dominated? The intermediary role of regional headquarters

What is the role of the Regional headquarters (RHQ) in mediating and channelling power and influence between global and local demands? This paper considers the role of power and influence in the development of identity at the... [ view full abstract ]

What is the role of the Regional headquarters (RHQ) in mediating and channelling power and influence between global and local demands? This paper considers the role of power and influence in the development of identity at the RHQ level. While there is a large body of academic debate surrounding headquarters-subsidiary relationship, the importance of the regional headquarters as an intermediary has been given much less focus. This paper attempts to move the debate forward critically reviewing some of the key arguments on the topic of the regional headquarters. The intermediary position of the RHQ exposes it to a top down hierarchy of power relations and a bottom up heterarchy of influence dynamics. We argue that furthering our understanding of the MNE as an arena of ‘political spaces’ is dependent upon explicating the central role that the RHQ enacts within the MNE. In making our claims, we draw conceptual themes from Judith Butler, Michel Foucault and Hannah Arendt, influential political can critical theorists, who have to date remained under-utilised in the study of power and politics within the MNE. Drawing further on identity theory, we present a framework for examining how relations of power and influence lead to the development of different identities for the RHQ. We propose the hybrid identity of the RHQ as a basis for future studies on power and influence within the MNE as a political arena.

Context & Background

An emerging stream of research in international business portrays the multinational enterprise (MNE) as a ‘political arena’, of a highly coordinated but fragmented structure, influenced by the power dynamics that exist within complex networks of intricate relationships and interactions between key actors (Kristensen & Zeitlin, 2005; Morgan & Kristensen, 2006; Clegg et al. 2016). From this perspective MNEs are constituted by struggles, diverging interests and conflict between key actors that leverage a multitude of power bases (Geppert & Dorrenbacher, 2014). These studies have mainly focused on the binary relationships between subsidiaries and corporate headquarters as key actors of power within hierarchical structures (Mudambi & Navarra, 2004; Bouquet & Birkinshaw, 2008; Dorrenbacher & Gammelgaard, 2006; 2016). It is well acknowledged that the MNE is a multi-layered structure (Forsgren et al. 2008; Meyer et al. 2011), but existing studies have failed to explore how different patterns of power domination and subjection meet and interact within these levels and the different processes through which this power is exercised (Geppert et al. 2016). For example, the regional headquarters (RHQ) is an intermediary structure created to control and coordinate the flow of knowledge and resources between global and local actors (Nell et al. 2011; Mahnke et al. 2012; Verbeke & Asmussen, 2016). Furthermore, the identities of intermediary actors, such as the RHQ, simultaneously exposed to diverse and conflicting interests, are altered and developed (Corley & Gioia, 2013; Ashforth, 2016) over time as they simultaneously become the ‘dominators’ - those who wield power, and the ‘dominated’ - those who are subjected to power (Foucault, 1980). Channelling Judith Butler’s work on power, and applying this to the RHQ’s position in MNE, this paper seeks to further explore how power may be conceptualised as a “double valence of subordinating and producing” in that power is simultaneously “acted on” the subject, but that power is “acted by” the subject (Butler, 1997:15). As such, as an intermediary structure, the RHQ’s identity may be shaped through both the power and influence ‘acted by’ the RHQ, but also the power and influence ‘acted on’ it by others within the MNE hierarchy (Figure 1).

We draw on insights from political theory and political agency, through Michel Foucault, Judith Butler and Hannah Arendt, in seeking to explore how the identity of the RHQ in particular is formed by being subjected to the top down power of the CHQ, but also formed through the bottom up influence generated from political agency. We seek to apply Arendt’s (1969) theory of ‘political spaces’ to the MNE and specifically to the intermediary role of the RHQ in managing how patterns of power interact. Drawing on existing work in the MNE as a political arena (Geppert & Dorrenbacher, 2014; Geppert et al. 2016), we define these spaces as ‘politically intense interactions of negotiation, manipulation and persuasion between the diverging interests of key actors within the MNE’. Intermediary positions confront strategic dualities (Birkinshaw et al. 2016), where by patterns of power domination and subjection meet and interact and yet, the different processes through which this power is managed is largely ignored in the international business literature (Geppert et al. 2016), particularly in the precarious role of the RHQ.

Figure 1: Power and Influence effects ‘on’ and ‘by’ RHQ

In light of the aforementioned shortcomings, this paper seeks to address two significant issues that are essential for further enhancing the political perspective of the MNE. First, the significant role of the regional headquarters (RHQ) in balancing and channelling the power dynamics that meet and interact between global and local actors is largely overlooked. The unique intermediary position of the RHQ within this complex multi-layered hierarchical structure, and the inherent contradictory demands of operating in this dual position, generates an intensity of conflicting power dynamics with key actors, resulting in identity ambiguity at the RHQ level. Second, we argue that studies in the IB field have largely failed to draw on seminal insights from political theory, which are useful in understanding the different identities that the RHQ may develop within this intermediary position. There is a need to explore the above two problems through further conceptualising the MNE as a political entity. Drawing on seminal arguments from political and identity theory, we aim to explore the crucial role of the RHQ within this political arena, by conceptualising the different identities it may develop. We develop a theoretical framework that demonstrates this line of reasoning and allows us to conceptualise the different power dynamics that the RHQ is exposed to.

References

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