Managerial Coordination Challenges in the Alignment of Capabilities and New Subsidiary Charters in MNEs. Issue 12 (December 2017)

• Record Type: Journal Article
• Authors: Friesl, Martin; Silberzahn, Raphael
• Is Part Of: Organization studies. Volume 38:Issue 12(2017)
• Page Start: 1709
• Page End: 1731
• Publication Date: 2017-12
• Subjects: capability development -- coordination -- micro-foundations -- multinational enterprise -- subsidiary change -- subsidiary charter; Organizational sociology -- Periodicals; Organizational behavior -- Periodicals; Organization -- Periodicals; 302.35
• DOI: 10.1177/0170840617693271
• Languages: English
• ISSNs: 0170-8406

Abstract

Subsidiary-level change requires the alignment of subsidiary charters and capabilities. Yet, the mechanisms through which the alignment of charters and capabilities unfolds are not yet well understood. In this paper, we investigate alignment from the perspective of managerial coordination. Drawing on a longitudinal study of a global IT firm, we identify three coordination mechanisms (charter-, experience-, and interaction-based coordination). By tracing the shifts in these coordination mechanisms over time and by specifying the implications of each mechanism for capability level change, we explain how managerial coordination influences alignment via subsidiary level capability change as well as alignment via the potential renegotiation of charters. This also allows us to provide new insights into situations of misalignment by explaining that particular mechanisms of coordination may become a source of decoupling between subsidiary actions and HQ mandates and may also result in capability level inertia. Moreover, while prior research has already acknowledged the role of interaction-based coordination for capability level change we show how and why such a mechanism of coordination emerges.