ORGANIZATION, COGNITION AND POLITICS IN MNCs. Longitudinal Evidence from an Italian Family-Owned Multinational Corporation

This thesis bridges ideas from both international business (IB) and institutional perspectives and offers a holistic view of the organizational, cognitive and political concerns characterizing the headquarter (HQ)-subsidiary relationships. The relevance of specific national institutional contexts for multinational corporations (MNCs) is highlighted. Particularly, the HQ-subsidiary perception gap - the difference in perception between subsidiary and HQ managers regarding the subsidiary’s role - is one of the key challenges faced by MNCs. Both IB and institutional approaches, however, have neglected this topic, and, especially, its institutional derivation and political dynamics. In this thesis I investigate the emergence and evolution of an HQ-subsidiary perception gap and its metamorphosis into a politically laden phenomenon. The single case research design with embedded multiple units of analysis draws on qualitative, longitudinal data referring to a process of cross-border, post-acquisition integration. The findings suggest that the emergence of an HQ-subsidiary perception gap is explained by the organizational and institutional distance existing between the two actors of the dyad. Moreover, this relationship is moderated by the status differential between the HQ and the acquired subsidiary, and between the countries in which the actors are located. Once emerged, the perception gap evolves through three different process loops - stabilizing, polarizing and neutralizing of the HQ-subsidiary interactions and of the quality of the HQ-subsidiary relationship - and becomes an instrument of political contention. Beyond the phenomenon of HQ-subsidiary perception gap, this thesis explores the meso level of subsidiaries’ organizational design, a topic that has been hitherto overlooked by institutional scholars. Through a longitudinal and comparative analysis of subsidiaries’ organizational configurations and boards of directors composition, I bring attention to the enduring relevance of societal specific logics. Overall, this thesis portrays MNCs as places in which institutional-bound organizational, cognitive and political issues dynamically coexist and interact.