Relational Determinants of Attention The Voice of a Subsidiary Initiative

Relational determinants of attention the voice of a

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Relational Determinants of Attention: The Voice of a Subsidiary Initiative taking. This dimension refers to the conscious and deliberate actions of subsidiary managers in their marketplace (Birkinshaw & Hood, 1998; Birkinshaw et al., 1998). Initiative tak- ing is similar to other forms of “taking charge” behavior (Morrison & Milliken, 2003; Morrison & Phelps, 1999) in that it is voluntary (not formally required by headquarters) and change-oriented (that is, aimed at improving a subsidiary’s status and perceived significance in a corporate system). Subsidiary initiatives are typically directed toward new products or services, or new market opportu- nities. And they usually represent an extension to or departure from the subsidiary’s established man- date. Evidence from a variety of sources highlights the potential value of subsidiary initiatives for a firm as a whole (Rugman & Verbeke, 2001), but their outcomes are uncertain and to some degree embedded in their local market contexts, so the effectiveness of subsidiary initiatives as attention- capturing tools is ambiguous (Schulz, 2001). In fact, Birkinshaw (2000) argued that many MNEs are intolerant of ideas and proposals that have not been directly solicited from the top and that, as a result, subsidiary managers are sometimes reluctant to fully exert their entrepreneurial influence. In this study, we argue that initiative taking can generate flows of positive attention from parent companies both directly and indirectly. The direct effect is likely to be experienced during routine visits to a subsidiary operation. Consider an exam- ple from our research interviews: when the CEO of ABB, a Swiss-Swedish engineering group, visited 582 June Academy of Management Journal
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the managers of its Czech subsidiary, he discovered that they had come up with the rather ingenious idea of linking the company’s administrative com- puters at night (when they were not used) to lever- age their combined processing capacity. This meta- network, which allowed the company to more quickly run R&D algorithms with a particular math- ematical structure, gave unprecedented recognition and support to the Czech subsidiary. The indirect effect takes two forms: either headquarters execu- tives see the early-stage results of a subsidiary ini- tiative in the form of increased revenues or higher profitability, or the individuals behind the initia- tive develop a reputation across the MNE for their actions and subsequently come to the attention of headquarters executives. Hypothesis 2a. Initiative taking by a subsid- iary’s managers is positively related to the pos- itive attention that the subsidiary receives from corporate headquarters. Profile building. This dimension refers to the broad set of efforts undertaken by subsidiary man- agers to improve their image, credibility, and rep- utation within their parent MNE. If initiative taking is fundamentally about action taken in the local subsidiary context, profile building is the comple- mentary set of activities focused on the corporate network. The logic stems from the argument that
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