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Developing successful assumed autonomy‐based initiatives

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Andrew Cavanagh explore the mechanisms by which subsidiaries attract or avoid headquarters attention in developing successful assumed autonomy-based initiatives.

Image courtesy of interviewee. February 7, 2024

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This video video presents the findings of a study focused on "subsidiary initiatives" within multinational enterprises, anchored in the concept defined by Birkinshaw in 1997, where these initiatives begin with identifying opportunities and culminate in resource commitment. The authors note that although subsidiary initiatives enhance a subsidiary's role in the broader enterprise, they often remain under-researched and poorly understood.

A significant aspect of the study is "assumed autonomy," where subsidiaries act independently, often without headquarters' direct involvement. This video video behavior can lead to negative consequences, including punishment by headquarters for exceeding authority. However, it may also result in positive outcomes if managed properly.

The authors utilize the Attention-Based View (ABV) to explain how subsidiaries can secure positive attention from headquarters through two main mechanisms: avoiding negative attention via "non-disclosure" and actively "selling" initiatives. They identify three key constructs that contribute to success:

1. **Non-Disclosure**: Subsidiaries can avoid negative headquarters attention by not disclosing certain initiatives until financial success is demonstrated.

2. **Initiative Selling**: After achieving success, subsidiaries should seek to align their initiatives with corporate goals to attract positive attention.

3. **Timing**: There is a critical timing element, where subsidiaries initially maintain non-disclosure to develop initiatives adequately before presenting them for approval to obtain positive attention.

The study also emphasizes the balance multinational managers need to strike between maintaining non-disclosure to foster initiative development and effectively promoting these initiatives to headquarters afterward.

Practically, the findings suggest that headquarters should adopt a more open-minded approach to subsidiary autonomy to foster successful initiatives, rather than enforcing strict oversight that may stifle innovation. Overall, the study contributes to understanding how subsidiaries can successfully navigate their dual role of independence and alignment within multinational corporations.

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X-TIMESTAMP-MAP=LOCAL:00:00:00.000,MPEGTS:90000

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So, so at the core of, of this particular study,

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that my co-authors and I undertook, is the notion

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of subsidiary initiatives,

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which originate from the study of Birkinshaw in 97,

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who states that an initiative is fundamentally,

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an entrepreneurial process that begins, firstly

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with the identification of a potential opportunity

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for a subsidiary, and then ends with the commitment

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of resources towards the achievement of that opportunity.

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Um, and those opportunities are typically operationalized in

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the form of things like new products, services,

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and also market opportunities.

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Um, for our study,

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and certainly in line with the original classifications

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of initiatives, we view them as specific sets of actions

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that our case at least seek

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to extend the subsidiary's role within the broader

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multinational enterprise, perhaps.

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So, despite being acknowledged rather

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as a really important mechanism for subsidiaries

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to advance their role within the corporation,

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what we've found is that these initiatives have actually

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remained quite, under or relatively misunderstood,

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and certainly under researched.

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Um, and in particular there was a real need

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for further research into

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how subsidiaries may develop those initiatives successfully.

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Um, and what we also found is that the lack of clarity,

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regarding the development of how

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to successfully develop those initiatives

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by an a subsidiary was even further exacerbated by a series

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of, contradictory recent findings,

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which mainly centered on the per, significance

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of the notion that we've described as assumed autonomy.

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Uh, so assumed autonomy is defined roughly as the type

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of autonomy that is assumed, hence the name,

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or independently developed by

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that subsidiary without any contribution

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or involvement from the head office.

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Uh, so in that sense, it's quite an entrepreneurial

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and risk-taking enterprise, by the subsidiary,

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that typically falls beyond their

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headquarters assigned authority.

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Um, in that sense it's,

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we see it being typified all the time.

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Um, we heard a lot of respondents say things like, it's easy

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to apologize later, rather than ask for permission first.

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Um, that, that sort of view really typifies,

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assumed autonomy,

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and we see it manifesting into the establishment

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of things like skunks works type operations,

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which are typically done

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behind headquarters backs without them knowing.

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Um, so in that way it's a really interesting notion and,

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and certainly contrasts quite sharply

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with the more traditional view of autonomy, which is one

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of being assigned by the headquarters to the subsidiary,

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sort of being given autonomy rather than

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taking it on yourself.

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Um, and, and the,

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the traditional view has it very much falling within the

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limits of a subsidiaries authority.

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It's very much what they're allowed to do.

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Um, what we found though is that while some subsidiary,

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while some findings rather have identified subsidiaries

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as being punished for displays of assumed autonomy,

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which isn't really surprising, given

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that it's an inherently subversive, display,

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an inherently sort of forbidden thing to do

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by the subsidiary, there's other studies which have actually

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identified subsidiaries being granted extended roles,

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on the basis of effectively doing the same thing.

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So that given the, the, the aforementioned importance

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of establishing an understanding of, of

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how subsidiaries can develop successful initiatives, we

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therefore sought to sort of resolve those really conflicting

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and confusing findings

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and establish a clearer picture of how,

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or perhaps the precise influence of assumed autonomy in

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that process to develop a theoretical understanding, a

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and an explanation of those conflicting findings

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that I mentioned, and also to explore how subsidiaries may

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therefore successfully develop assumed

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autonomy based initiatives.

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Um, we've grounded our study in the attention based

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view or the A BV.

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Um, this particular theory has been identified

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by a few studies as what, what's been called the, sort

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of the missing link in explaining the conditions,

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under which certain entrepreneurial actions

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by subsidiary managers can actually lead to an extension

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of their subsidiary's role.

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Um, so it is quite apt in the context of this study.

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Um, according to the theory, attention may be viewed as sort

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of a, quite a meta construct

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that encompasses things like noticing and encoding,

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and then interpreting available information,

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and the associated directing of time and effort

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and resources towards that.

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So in the context of our study, we focused on attention

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that originates from the headquarters of the multinational.

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Um, so within that context, attention represents the,

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effectively the shared capacity of headquarters management,

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not necessarily one manager, but the overall headquarters.

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Um, and it's typically operationalized

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through things like the, procedural

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and communication channels

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between the headquarters and subsidiary.

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Um, given all of that, a key assumption of the theory

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therefore, is that headquarters attention is a really

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scarce, it's unlimited a, a

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and a really critical resource,

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that subsidiaries need to compete for.

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Um, there's unlimited amount of headquarters attention.

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Um, so in order to gain that limited resource,

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initiatives, therefore become really important as sort

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of an an attention attracting mechanism.

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So within the A BV, there's sort of two perspectives,

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that, that have become quite an important within

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the context of our study.

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Um, and, and more traditionally,

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at least the A BV research has,

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has largely focused on the assumption

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that headquarters is a positive thing, that it's a,

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it's the sort of thing that subsidiaries would want.

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They would have a desire for that attention,

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and the support that it brings.

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Um, on that, most of those studies

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that have emphasized the link

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between positive headquarters attention,

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and the extension of the subsidiary's role,

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some have even identified positive headquarters attention

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as a necessary ingredient, in that process.

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Uh, so those studies that have gone down

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that path have really highlighted the importance

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of initiatives as a vital mechanism, in order to be able

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to track that positive attention from the headquarters.

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Um, some previous studies have suggested,

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that those initiatives will lead to both direct

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and also indirect, positive attention flows,

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to the subsidiary.

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So when we talk about direct flows here,

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we're talking about things like routine visits,

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by headquarters to the subsidiary,

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while those more indirect flows involve things like the

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headquarters noticing the positive outcomes

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of the initiatives, like increased revenue

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and profitability,

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or potentially even things like the enhanced reputation

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of subsidiary managers

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who are instrumental in the development

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of those initiatives.

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So given all that,

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and perhaps unsurprisingly, given the link

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between initiatives and autonomy, the majority

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of the existing literature within the attention based view,

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views autonomy as very much an important factor

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that is at very least complimentary, or,

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or typically complimentary

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to positive headquarters attention,

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or at least isn't detracting from it.

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Uh, the A BV

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therefore represents a really important theoretical,

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explanation and understanding for those findings

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that we mentioned before

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that highlighted subsidiaries being rewarded for,

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engaging in assumed autonomy,

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from an attention based perspective,

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the subsidiaries autonomous behavior in those examples is

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seen to attract positive attention,

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which typically facilitates six extension of their role.

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The other perspective, though that was really important here

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for our study, is, is that of negative attention.

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And so, despite the aforementioned benefits

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that have have been identified

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and associated with headquarters attention, some

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of the original theorists like Bke Bouquet

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and Birkinshaw have actually acknowledged

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that attention won't always be a good thing, certainly

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for subsidiaries, that there are some quite significant

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negative consequences that may occur,

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and be associated with headquarters attention.

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Uh, and yet despite that, most of the literature

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on attention, hasn't really explored those consequences.

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It's, it, it's, it's overlooked in often in, in many cases,

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that notion of negative headquarters attention.

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Um, so that's, that was a really interesting thing for us

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and something that we wanted to explore.

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Uh, further, it's important to note here that negative,

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headquarters attention won't always be deliberate either,

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that sometimes, headquarters can, can forget

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or unintentionally cause detrimental consequences,

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through their attention that they, they attribute

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to subsidiaries.

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Um, the research that does exist in this area has,

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has indicated and suggested

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that negative headquarters attention has the potential

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to lead to dismissal.

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Uh, so, so cancellation of subsidiary initiatives,

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and in some cases even the removal

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of the subsidiaries mandate or their charter altogether.

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So, so potentially really significant consequences here.

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Um, and that contrast, obviously,

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with your aforementioned literature,

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which has surrounded positive attention, which has been

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that it's, it's a great thing for subsidiaries.

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Um, there's actually some evidence here to suggest that

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that would not be always be the case at all.

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So given the, the quite subversive and,

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and quite risky nature of assumed autonomy,

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especially when it contradicts with

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what headquarters have told subsidiaries they should be

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doing, and also

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because of headquarters typically inherent resistance

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and skepticism towards anything from the subsidiary

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that might contradict what they've been asked to do,

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it follows that any displays of assumed autonomy would

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therefore attract negative attention.

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So given that perspective,

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that A BV also represents a really important theoretical

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explanation for those findings that identify as subsidiaries

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as being punished, for assuming autonomy.

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Um, so, so, so overall here through the distinction

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between firstly positive

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but also negative headquarters attention,

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this theory is a really important explanation

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for the occurrence of how we can see both positive

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and negative consequences

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for assuming autonomy by subsidiaries.

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Um, what it doesn't do though is explain why it is

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that certain displays

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of assumed autonomy would garner positive attention

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while others would garner and,

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and attract negative attention.

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So one of the key focuses,

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and perhaps the, the main focus of our study,

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therefore, was to extend the theory and,

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and to really investigate what it was

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that would determine whether a subsidiary would attract

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positive attention by assuming autonomy

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and what it was that would ensure or,

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or that would likely, ensure

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that it attracts negative attention

244
00:11:10.785 --> 00:11:12.885
for doing the same thing effectively.

245
00:11:13.465 --> 00:11:14.725
In our study here,

246
00:11:14.785 --> 00:11:17.845
we utilized a multiple case study design,

247
00:11:17.905 --> 00:11:20.165
for the research that was both constructivist

248
00:11:20.165 --> 00:11:21.685
and also qualitative in nature.

249
00:11:22.345 --> 00:11:25.685
Um, so when it came to the case selection for our research,

250
00:11:26.105 --> 00:11:29.005
we engaged with five different multinationals,

251
00:11:29.185 --> 00:11:31.685
and they were selected from a deliberately varied range

252
00:11:31.685 --> 00:11:35.125
of industries, which ended up encompassing, it

253
00:11:35.785 --> 00:11:39.285
mining human resource management, and also mining

254
00:11:39.465 --> 00:11:42.005
and welding mentioned, mining before.

255
00:11:42.705 --> 00:11:44.205
So that covered both manufacturing

256
00:11:44.705 --> 00:11:46.965
and services industry sectors.

257
00:11:47.345 --> 00:11:51.085
Um, all of the parent firms of the, the companies

258
00:11:51.085 --> 00:11:52.765
that we spoke with here had

259
00:11:52.865 --> 00:11:55.605
Had to have a history of international operations in order

260
00:11:55.625 --> 00:11:59.125
to be appropriate for selection in our study,

261
00:11:59.265 --> 00:12:02.445
and had established foreign subsidiaries of varying sizes,

262
00:12:02.585 --> 00:12:04.485
across a range of international markets,

263
00:12:05.025 --> 00:12:06.365
across the globe.

264
00:12:06.745 --> 00:12:09.685
Um, incorporating the, our, our decision there

265
00:12:09.685 --> 00:12:12.685
to incorporate that range of industries was important.

266
00:12:12.825 --> 00:12:14.525
And as I mentioned, quite deliberate

267
00:12:14.525 --> 00:12:15.565
because it addressed one

268
00:12:15.565 --> 00:12:19.325
of the key gaps within the literature, which was

269
00:12:19.325 --> 00:12:23.365
that not many service firms had been highlighted, and,

270
00:12:23.365 --> 00:12:25.605
and focused on and discussed within this

271
00:12:25.635 --> 00:12:26.845
sort of body of literature.

272
00:12:27.105 --> 00:12:30.965
Um, we actually included three service firms, to, in,

273
00:12:31.145 --> 00:12:33.965
to sort of address that limited representation that

274
00:12:33.965 --> 00:12:35.325
that industry sector had seen.

275
00:12:35.905 --> 00:12:39.725
Um, so within each case, the respondents we required,

276
00:12:39.875 --> 00:12:43.125
they had to be senior managers, who need, who had

277
00:12:43.425 --> 00:12:45.525
and possessed direct reporting responsibilities

278
00:12:45.705 --> 00:12:48.365
and communication lines between the subsidiary

279
00:12:48.825 --> 00:12:50.325
and the corporate headquarters, so

280
00:12:50.325 --> 00:12:52.445
that they had an understanding of that dynamic there.

281
00:12:52.985 --> 00:12:56.205
Uh, for the subsidiary managers that we interviewed,

282
00:12:56.205 --> 00:12:58.685
this would ensure that they had an awareness of certainly

283
00:12:58.705 --> 00:13:02.205
and, and likely an involvement in, any of the displays

284
00:13:02.205 --> 00:13:03.605
of assumed autonomy that we were looking at.

285
00:13:04.065 --> 00:13:07.485
Uh, while for us, senior headquarters managers

286
00:13:07.525 --> 00:13:10.605
that we interviewed, they would then be in a really strong

287
00:13:10.805 --> 00:13:13.965
position to be able to gauge the type of attention,

288
00:13:14.235 --> 00:13:16.685
that headquarters devoted to the subsidiary

289
00:13:16.685 --> 00:13:18.125
as a result of those initiatives.

290
00:13:18.585 --> 00:13:21.045
Uh, and that ultimately led to the incorporation

291
00:13:21.045 --> 00:13:23.925
of the five cases that I mentioned before,

292
00:13:24.145 --> 00:13:26.765
and all of those five cases incorporated.

293
00:13:26.985 --> 00:13:28.445
Um, importantly the views

294
00:13:28.505 --> 00:13:30.765
of both headquarters and subsidiaries.

295
00:13:31.425 --> 00:13:33.965
In terms of the sources of data,

296
00:13:34.345 --> 00:13:37.685
we collected 19 semi-structured interviews.

297
00:13:38.265 --> 00:13:39.845
Um, the interviews tended

298
00:13:39.845 --> 00:13:41.685
to be roughly an hour or so in length.

299
00:13:41.905 --> 00:13:44.765
Um, I think the, the range was from about 30 minutes

300
00:13:44.785 --> 00:13:46.005
to about an hour and a half,

301
00:13:46.545 --> 00:13:48.525
and they were conducted ideally in person,

302
00:13:48.665 --> 00:13:50.725
but of course, given the international nature

303
00:13:51.225 --> 00:13:53.085
of the firms involved here, a lot

304
00:13:53.085 --> 00:13:55.005
of them were also contacted over phone

305
00:13:55.625 --> 00:13:58.725
or via, platforms like Skype and Zoom.

306
00:13:59.345 --> 00:14:01.805
Uh, when it comes to data analysis, just briefly,

307
00:14:01.985 --> 00:14:04.485
we did employ the joy model here,

308
00:14:04.485 --> 00:14:06.525
for data analysis purposes,

309
00:14:06.525 --> 00:14:09.565
and also very much adopted an abductive approach so

310
00:14:09.565 --> 00:14:11.245
that we could sort of move back

311
00:14:11.245 --> 00:14:12.725
and forth between the collection of

312
00:14:12.905 --> 00:14:14.245
and analysis of the data.

313
00:14:14.625 --> 00:14:17.885
As that process flowed on the study really does reinforce

314
00:14:18.065 --> 00:14:21.485
the A BV as a, a key theoretical explanation

315
00:14:21.565 --> 00:14:23.765
for the outcomes of assumed autonomy.

316
00:14:24.185 --> 00:14:26.125
Um, that distinction between positive

317
00:14:26.125 --> 00:14:28.285
and negative headquarters attention that I mentioned

318
00:14:28.285 --> 00:14:32.245
before, was really found to be absolutely key

319
00:14:32.545 --> 00:14:35.165
to explaining those, those conflicting findings

320
00:14:35.165 --> 00:14:36.525
that previous studies had highlighted.

321
00:14:36.985 --> 00:14:40.645
Um, but we did also, again find that there was,

322
00:14:40.785 --> 00:14:42.485
in its former form, at least in,

323
00:14:42.585 --> 00:14:46.085
in the previous understanding of the theory, there was

324
00:14:46.115 --> 00:14:50.605
that inability to explain why we saw some subsidiaries

325
00:14:50.635 --> 00:14:53.285
receiving rewards and others being punished.

326
00:14:53.825 --> 00:14:56.685
Um, so in addressing that limitation of the study,

327
00:14:57.105 --> 00:15:01.205
we revealed three key constructs in our findings, each

328
00:15:01.205 --> 00:15:03.565
of which played a really important role in determining

329
00:15:03.565 --> 00:15:06.045
whether the subsidiary would be punished,

330
00:15:06.045 --> 00:15:07.725
through negative headquarters attention,

331
00:15:08.065 --> 00:15:10.965
or whether it would be rewarded through assumed, sorry,

332
00:15:11.225 --> 00:15:13.285
through positive headquarters attention.

333
00:15:13.665 --> 00:15:15.045
Uh, and those three constructs

334
00:15:15.045 --> 00:15:17.645
that we identified were subsidiary non-disclosure

335
00:15:18.255 --> 00:15:20.525
initiative, selling and timing.

336
00:15:20.705 --> 00:15:22.605
So I'll go through each of those in turn.

337
00:15:23.065 --> 00:15:26.765
So subsidiary non-disclosure first,

338
00:15:26.875 --> 00:15:28.125
what we found here is that

339
00:15:28.125 --> 00:15:31.485
before even considering, any thought

340
00:15:31.505 --> 00:15:34.925
or attempt of drawing positive attention towards initiatives

341
00:15:34.925 --> 00:15:37.485
that the subsidiaries developed, what we found was

342
00:15:37.485 --> 00:15:39.045
that they needed to first make sure

343
00:15:39.045 --> 00:15:41.725
that those initiatives didn't attract negative attention,

344
00:15:41.875 --> 00:15:44.965
that to even just get off the ground, they needed not

345
00:15:44.965 --> 00:15:46.445
to be seen as a bad thing.

346
00:15:46.865 --> 00:15:49.605
Uh, and, and so specifically our findings introduced

347
00:15:50.205 --> 00:15:53.565
a key mechanism, therefore, by which subsidiaries can avoid

348
00:15:53.565 --> 00:15:55.325
that initial negative attention.

349
00:15:55.745 --> 00:15:57.445
Uh, when developing the initiatives,

350
00:15:57.445 --> 00:16:01.485
which we termed non-disclosure, in developing that term,

351
00:16:01.985 --> 00:16:04.485
we sort of used it to describe any instances

352
00:16:04.485 --> 00:16:07.725
where a subsidiary would elect against informing

353
00:16:07.725 --> 00:16:09.965
headquarters of particular activities

354
00:16:09.965 --> 00:16:12.805
or behavior, which of course includes the development

355
00:16:12.805 --> 00:16:15.565
of initiatives that fall beyond its authority,

356
00:16:15.905 --> 00:16:17.365
and based on assumed autonomy.

357
00:16:17.905 --> 00:16:20.805
So our findings here also demonstrate the continuous nature

358
00:16:21.225 --> 00:16:22.445
of non-disclosure.

359
00:16:22.745 --> 00:16:25.645
It it's not black or white, it's not on or off here.

360
00:16:25.985 --> 00:16:27.725
Um, what we found was that some sub,

361
00:16:27.915 --> 00:16:32.845
some subsidiaries would employ non-disclosure completely.

362
00:16:33.265 --> 00:16:35.085
Uh, they would, they would not elect,

363
00:16:35.105 --> 00:16:36.725
they'd elect against advising

364
00:16:36.985 --> 00:16:39.485
and updating headquarters, at all,

365
00:16:40.015 --> 00:16:43.405
while others would, would sort of drip feed bits

366
00:16:43.405 --> 00:16:45.965
and pieces of information that were, seemed to be crucial

367
00:16:46.145 --> 00:16:47.885
and, and that were necessary,

368
00:16:47.945 --> 00:16:49.805
but didn't still give too much away.

369
00:16:50.265 --> 00:16:52.005
So regardless of the extent

370
00:16:52.345 --> 00:16:55.125
of which non-disclosure is applied, one

371
00:16:55.125 --> 00:16:57.165
of the core elements that remains throughout is, is

372
00:16:57.165 --> 00:16:58.685
that it was a very much a deliberate

373
00:16:58.705 --> 00:17:00.765
and a conscious decision,

374
00:17:00.985 --> 00:17:03.925
to refrain from raising headquarters awareness about

375
00:17:03.925 --> 00:17:06.805
what they were doing, in terms of those initiatives.

376
00:17:07.425 --> 00:17:11.485
So the resulting focused, not, the,

377
00:17:11.485 --> 00:17:12.885
the focus on non-disclosure

378
00:17:12.885 --> 00:17:15.445
therefore allow the subsidiary to develop,

379
00:17:15.545 --> 00:17:18.045
and implement their initiatives undisturbed.

380
00:17:18.045 --> 00:17:20.965
So there wasn't any interference from the head office A

381
00:17:20.985 --> 00:17:22.325
and that meant that they were also

382
00:17:22.325 --> 00:17:25.325
therefore able to avoid any negative headquarters attention.

383
00:17:25.905 --> 00:17:29.685
Um, in doing that, the subsid subsidiary rather than was

384
00:17:29.685 --> 00:17:33.445
therefore was able to not only escape punishment,

385
00:17:33.545 --> 00:17:34.645
for sort of doing something

386
00:17:34.645 --> 00:17:36.245
that they weren't really supposed to be doing.

387
00:17:36.705 --> 00:17:39.885
Um, certainly that was unauthorized, and

388
00:17:39.985 --> 00:17:43.085
but also reduces the chance of those initiatives,

389
00:17:43.085 --> 00:17:45.925
therefore being rejected prematurely,

390
00:17:46.065 --> 00:17:49.270
before it could demonstrate financial success, you know,

391
00:17:49.270 --> 00:17:50.630
before it could establish itself

392
00:17:50.630 --> 00:17:52.245
and demonstrate that there are positive outcomes.

393
00:17:52.745 --> 00:17:54.805
It was important that subsidiaries could sort

394
00:17:54.805 --> 00:17:58.085
of keep it on the down low, make sure it can develop and,

395
00:17:58.085 --> 00:17:59.085
and, and develop

396
00:17:59.145 --> 00:18:02.485
and sort of, deliver on those positive outcomes for the,

397
00:18:02.485 --> 00:18:03.565
the overall multinational.

398
00:18:03.595 --> 00:18:04.725
That was non-disclosure.

399
00:18:05.385 --> 00:18:07.645
The second key finding that we,

400
00:18:07.755 --> 00:18:10.725
that we identified in this study was the need

401
00:18:10.745 --> 00:18:12.205
for initiative selling.

402
00:18:12.785 --> 00:18:16.685
Uh, so in addition to highlighting the importance

403
00:18:16.685 --> 00:18:18.885
of avoiding that initial negative attention

404
00:18:18.995 --> 00:18:22.125
through non-disclosure, our findings also highlighted

405
00:18:22.155 --> 00:18:25.925
that subsidiaries would at least eventually, need

406
00:18:26.045 --> 00:18:29.645
to attract positive headquarters attention if they wanted

407
00:18:29.705 --> 00:18:32.525
to be granted an extended role through those initiatives.

408
00:18:32.985 --> 00:18:36.525
Um, and so what we did in our study was adapt the notion

409
00:18:36.525 --> 00:18:38.445
of issue selling to the context

410
00:18:38.705 --> 00:18:42.205
of subsidiary initiatives here, as,

411
00:18:42.205 --> 00:18:44.005
and in particular, those initiatives that fell

412
00:18:44.005 --> 00:18:47.605
beyond the subsidiaries authority, the identification,

413
00:18:47.605 --> 00:18:50.565
therefore, of those initiative selling strategies,

414
00:18:50.625 --> 00:18:52.045
by which subsidiaries that were able

415
00:18:52.045 --> 00:18:55.485
to garner positive attention, from headquarters,

416
00:18:56.025 --> 00:18:58.005
for the initiatives that fell beyond the scope, and,

417
00:18:58.005 --> 00:19:00.005
and in some cases even contradicted the

418
00:19:00.005 --> 00:19:01.085
subsidiaries mandate.

419
00:19:01.585 --> 00:19:04.765
Um, and charter therefore constitutes a really interesting

420
00:19:05.065 --> 00:19:07.645
and valuable extension of our understanding of attention,

421
00:19:07.945 --> 00:19:09.365
within the multinational.

422
00:19:09.785 --> 00:19:11.485
So what we did through our findings,

423
00:19:11.485 --> 00:19:14.685
or what we were able to do in our findings was identify two

424
00:19:14.905 --> 00:19:17.205
key criteria that actually were found

425
00:19:17.205 --> 00:19:19.525
to increase the probability that those assumed

426
00:19:20.525 --> 00:19:23.365
autonomy based initiatives would attract the necessary

427
00:19:23.845 --> 00:19:25.125
positive attention,

428
00:19:25.315 --> 00:19:26.885
that the subsidiaries were looking for.

429
00:19:27.025 --> 00:19:30.165
And those two, two criteria were firstly,

430
00:19:30.445 --> 00:19:31.965
demonstrable financial success

431
00:19:32.545 --> 00:19:34.365
and secondly, corporate alignment.

432
00:19:35.145 --> 00:19:36.965
So if we, we, what we found was

433
00:19:36.965 --> 00:19:39.685
that if subsidiaries were able to sell their initiatives

434
00:19:40.275 --> 00:19:42.925
through those two criteria, if they were able

435
00:19:42.925 --> 00:19:46.245
to demonstrate both of those things, then that would,

436
00:19:46.385 --> 00:19:49.325
be able to build headquarters knowledge and understanding

437
00:19:49.705 --> 00:19:52.565
and awareness even of their competencies and,

438
00:19:52.665 --> 00:19:57.045
and actions in such a way that not only reduces,

439
00:19:57.105 --> 00:20:00.285
things like the information asymmetry that we typically see

440
00:20:00.285 --> 00:20:02.725
between headquarters and subsidiaries,

441
00:20:02.825 --> 00:20:05.645
but also importantly increases the likelihood

442
00:20:05.875 --> 00:20:08.725
that the resulting headquarters attention will be positive

443
00:20:08.865 --> 00:20:10.365
in nature rather than negative.

444
00:20:10.905 --> 00:20:15.005
Uh, here we develop the term corporate alignment to describe

445
00:20:15.515 --> 00:20:18.805
effectively a calibration between the initiatives

446
00:20:19.225 --> 00:20:21.885
and headquarters established philosophies and goals.

447
00:20:22.305 --> 00:20:24.165
Uh, and we've, what we found it was really,

448
00:20:24.165 --> 00:20:26.885
really important in attracting that positive attention.

449
00:20:27.345 --> 00:20:32.325
Um, the identification of corporate alignment, is,

450
00:20:32.425 --> 00:20:35.605
is a key requirement here, at that, that the fact

451
00:20:35.605 --> 00:20:37.885
that they have to do that we thought was really interesting

452
00:20:38.165 --> 00:20:40.645
actually, because what it is effectively asking is

453
00:20:40.645 --> 00:20:44.725
that subsidiaries need to demonstrate that the initiatives

454
00:20:44.725 --> 00:20:46.525
that they've undertaken here, which go

455
00:20:46.525 --> 00:20:47.845
beyond their authority,

456
00:20:48.065 --> 00:20:50.005
and in some cases even contradict

457
00:20:50.235 --> 00:20:53.445
what the headquarters ask them to do, they actually need

458
00:20:53.445 --> 00:20:56.205
to sell them in such a way that they convince headquarters

459
00:20:56.235 --> 00:20:59.325
that they're in fact aligned with the corporate strategy.

460
00:20:59.425 --> 00:21:00.685
So that was really interesting.

461
00:21:00.985 --> 00:21:02.765
Um, in terms of the findings,

462
00:21:03.505 --> 00:21:06.165
the final key ingredient effectively in terms

463
00:21:06.185 --> 00:21:08.365
of ensuring the success and,

464
00:21:08.365 --> 00:21:10.965
and the resulting positive attention for subsidiaries

465
00:21:11.635 --> 00:21:13.925
when it came to their initiatives here was

466
00:21:13.985 --> 00:21:15.005
the issue of timing.

467
00:21:15.665 --> 00:21:17.925
So, so far what we've suggested is

468
00:21:17.925 --> 00:21:19.965
that subsidiaries need non-disclosure,

469
00:21:20.505 --> 00:21:22.365
but then also initiative selling

470
00:21:22.905 --> 00:21:25.525
of their assumed autonomy based initiatives,

471
00:21:25.735 --> 00:21:28.245
which initially sounds quite contradictory.

472
00:21:28.305 --> 00:21:30.445
How can you not tell headquarters

473
00:21:30.625 --> 00:21:34.165
but then also sell those same initiatives,

474
00:21:34.265 --> 00:21:35.445
to get the positive attention?

475
00:21:35.985 --> 00:21:38.685
So to resolve that apparent contradiction,

476
00:21:38.715 --> 00:21:39.765
what we identified

477
00:21:39.825 --> 00:21:43.405
as a really important factor here was this issue of timing.

478
00:21:43.985 --> 00:21:46.085
Uh, and more specifically, we identified

479
00:21:46.085 --> 00:21:48.005
that subsidiaries are best served

480
00:21:48.185 --> 00:21:50.565
by initially employing non-disclosure.

481
00:21:50.705 --> 00:21:52.805
So in those initial stages,

482
00:21:53.105 --> 00:21:56.565
not informing the head office so much of their initiatives,

483
00:21:57.345 --> 00:21:58.565
at least before they're able

484
00:21:58.565 --> 00:21:59.725
to be developed and implemented.

485
00:22:00.025 --> 00:22:02.525
Um, so in that way they were seem to sort of buying time,

486
00:22:02.985 --> 00:22:04.405
so that they could provide,

487
00:22:04.765 --> 00:22:06.085
demonstrate those financial outcomes,

488
00:22:06.085 --> 00:22:07.645
which we identified as really important.

489
00:22:08.675 --> 00:22:11.445
Once then, they had been able to demonstrate that.

490
00:22:11.465 --> 00:22:14.205
So they've demonstrated their, their financial success,

491
00:22:14.205 --> 00:22:16.805
they've been able to highlight the corporate alignment

492
00:22:17.225 --> 00:22:18.725
of those initiatives over time.

493
00:22:19.115 --> 00:22:21.805
What we identified was that subsidiaries then look

494
00:22:21.825 --> 00:22:24.445
to sell those to headquarters so

495
00:22:24.445 --> 00:22:27.285
that they could then attract the positive attention,

496
00:22:27.375 --> 00:22:30.685
later down the track, which of course is more likely

497
00:22:30.705 --> 00:22:32.005
to lead to an extended role.

498
00:22:32.145 --> 00:22:33.925
So if you think of it in another way,

499
00:22:34.105 --> 00:22:36.245
and what we identified was that,

500
00:22:36.265 --> 00:22:38.485
if subsidiaries sell their assumed

501
00:22:39.005 --> 00:22:41.965
autonomy based initiatives too early, that is without

502
00:22:42.685 --> 00:22:44.325
sufficient incubating time effectively,

503
00:22:44.875 --> 00:22:47.045
then they would likely attract negative attention.

504
00:22:47.585 --> 00:22:49.005
Uh, but on the other hand,

505
00:22:49.145 --> 00:22:51.405
if the subsidiary is maintained non-disclosure

506
00:22:51.465 --> 00:22:54.245
of those initiatives and they never actually sold them

507
00:22:54.265 --> 00:22:56.885
to the head office, then they will unlikely

508
00:22:56.945 --> 00:22:59.965
to get the positive attention, that we identified

509
00:22:59.965 --> 00:23:02.125
as being really important in extending their role.

510
00:23:02.345 --> 00:23:06.045
So in that context, timing represents a really important

511
00:23:06.185 --> 00:23:09.645
and, and perhaps the key determinant of the success

512
00:23:09.985 --> 00:23:12.005
of those assumed autonomy based initiatives.

513
00:23:12.555 --> 00:23:15.605
What we identified in our study was that there are a,

514
00:23:15.685 --> 00:23:18.365
a couple of key key theoretical contributions,

515
00:23:18.425 --> 00:23:20.925
but also some practical implications,

516
00:23:20.925 --> 00:23:22.005
to come out of our work.

517
00:23:22.185 --> 00:23:26.045
So from a theoretical perspective, we first identified,

518
00:23:26.045 --> 00:23:28.525
that we're able to extend the attention based view

519
00:23:28.905 --> 00:23:32.365
by introducing that notion of subsidiary non-disclosure,

520
00:23:32.365 --> 00:23:34.805
that hadn't featured within the literature,

521
00:23:35.065 --> 00:23:37.325
the A BV literature previously,

522
00:23:37.545 --> 00:23:40.965
and builds on a sort of related notion of silence,

523
00:23:40.965 --> 00:23:43.485
which would, has sort of been quite prominent in the early

524
00:23:43.545 --> 00:23:45.485
two thousands in the literature,

525
00:23:45.745 --> 00:23:47.845
but extend it in this particular context.

526
00:23:48.385 --> 00:23:50.725
Um, and, and, and we've seen that through

527
00:23:50.955 --> 00:23:52.565
that non-disclosure, as I mentioned,

528
00:23:52.635 --> 00:23:55.325
that enables subsidiaries to avoid that key

529
00:23:56.005 --> 00:23:58.445
negative attention that would potentially sort of,

530
00:23:58.465 --> 00:24:01.805
defeat their, their, their subsidiary initiative.

531
00:24:02.745 --> 00:24:05.405
Um, so that's really important, in terms

532
00:24:05.405 --> 00:24:08.205
of its contribution to the a PV literature,

533
00:24:08.205 --> 00:24:11.125
because that hadn't fully recognized

534
00:24:11.345 --> 00:24:13.365
or acknowledged the importance of avoiding

535
00:24:13.365 --> 00:24:14.565
that negative attention.

536
00:24:14.805 --> 00:24:16.405
I mentioned previously that much

537
00:24:16.405 --> 00:24:18.805
of the focus within the literature had been on the positive

538
00:24:18.805 --> 00:24:21.925
things to come from, headquarters attention.

539
00:24:22.425 --> 00:24:23.925
Um, so as a result that

540
00:24:23.925 --> 00:24:26.245
that previous literature hadn't really considered those

541
00:24:26.245 --> 00:24:28.805
instances, through the utilization

542
00:24:28.805 --> 00:24:30.125
of things like assumed autonomy

543
00:24:30.495 --> 00:24:33.725
where subsidiaries initiative may actually extend beyond

544
00:24:33.725 --> 00:24:36.645
what it had been granted authority to do, and

545
00:24:36.645 --> 00:24:38.205
therefore might be more likely to,

546
00:24:38.305 --> 00:24:39.845
to attract negative attention.

547
00:24:40.105 --> 00:24:43.125
So we found a way for subsidiaries to be able to avoid that

548
00:24:43.265 --> 00:24:46.005
and, and to, highlight the importance of

549
00:24:46.005 --> 00:24:48.205
that particular action from subsidiaries.

550
00:24:48.865 --> 00:24:51.845
The second key theoretical contribution was,

551
00:24:52.345 --> 00:24:54.125
the way in which we were able to identify

552
00:24:54.125 --> 00:24:56.845
that subsidiaries could attract positive attention from

553
00:24:56.845 --> 00:24:58.445
those same initiatives.

554
00:24:58.865 --> 00:25:01.805
Uh, and, and in this context, we advanced the work

555
00:25:01.805 --> 00:25:03.565
of previous authors like Dorin, backer

556
00:25:03.565 --> 00:25:07.805
and G Guard, who had talked about initiative selling,

557
00:25:08.185 --> 00:25:10.365
in the context of assumed autonomy.

558
00:25:10.745 --> 00:25:11.765
And as I mentioned before,

559
00:25:11.765 --> 00:25:13.565
we also then identified two unique

560
00:25:13.705 --> 00:25:17.565
and quite specific criteria, that such initiatives

561
00:25:18.215 --> 00:25:19.245
would, would ensure

562
00:25:19.245 --> 00:25:22.645
that those initiatives receive more positive attention being

563
00:25:22.965 --> 00:25:25.645
demonstrable financial success and corporate alignment.

564
00:25:26.185 --> 00:25:27.405
Um, the requirement

565
00:25:27.405 --> 00:25:30.165
for corporate alignment in particular was quite a

566
00:25:30.165 --> 00:25:31.365
novel contribution here.

567
00:25:31.705 --> 00:25:34.525
Um, given that it effectively involves subsidiaries

568
00:25:34.805 --> 00:25:38.045
demonstrating that those same initiatives, which

569
00:25:38.065 --> 00:25:41.045
by their very nature exceed the subsidiaries authority

570
00:25:41.385 --> 00:25:43.445
and in some cases even contravene

571
00:25:43.985 --> 00:25:46.725
the explicit headquarters objectives,

572
00:25:46.875 --> 00:25:49.885
they are in fact supportive of corporate strategy.

573
00:25:50.305 --> 00:25:53.165
Um, so our identify, so quite an interesting

574
00:25:53.505 --> 00:25:55.725
and counterintuitive finding in that sense.

575
00:25:56.545 --> 00:26:01.085
Um, the third contribution here, looks at

576
00:26:01.085 --> 00:26:02.885
that issue of timing,

577
00:26:03.295 --> 00:26:05.845
which again is quite a novel contribution,

578
00:26:05.845 --> 00:26:07.325
and something which hadn't been discussed

579
00:26:07.505 --> 00:26:08.525
in the literature here.

580
00:26:08.905 --> 00:26:11.405
Um, specifically, we highlight timing

581
00:26:11.545 --> 00:26:14.485
as effectively a boundary condition on the ability

582
00:26:14.505 --> 00:26:18.165
of non-disclosure to firstly avoid that negative attention,

583
00:26:18.545 --> 00:26:21.285
but also on the ability of initiative selling,

584
00:26:21.465 --> 00:26:23.605
to actually attract positive attention.

585
00:26:23.745 --> 00:26:26.405
So without the timing being right, both of those

586
00:26:27.055 --> 00:26:29.485
super important previous requirements,

587
00:26:29.605 --> 00:26:30.925
wouldn't be sufficient

588
00:26:30.925 --> 00:26:33.245
to ensure a positive result for the subsidiary.

589
00:26:33.625 --> 00:26:35.925
So in that way, timing was seen

590
00:26:35.925 --> 00:26:39.405
to provide quite a unique solution, to that seemingly

591
00:26:40.025 --> 00:26:43.085
irreconcilable demands of firstly, non-disclosure,

592
00:26:43.825 --> 00:26:45.445
but then also initiative selling

593
00:26:45.825 --> 00:26:47.965
for those assumed autonomy based initiatives.

594
00:26:48.555 --> 00:26:51.245
Finally, we also did identify a, a couple

595
00:26:51.265 --> 00:26:54.645
of key practical contributions for managers to, so

596
00:26:54.825 --> 00:26:56.725
for those managers at a subsidiary level,

597
00:26:57.505 --> 00:27:01.365
we revealed the importance of striking a key balance

598
00:27:01.365 --> 00:27:03.685
between non-disclosure on one hand

599
00:27:04.105 --> 00:27:06.645
and the subsequent selling of those initiatives.

600
00:27:06.665 --> 00:27:07.925
And, and it is very difficult.

601
00:27:08.105 --> 00:27:10.365
Not all subsidiaries were able to do it,

602
00:27:10.705 --> 00:27:13.805
but they needed to be able to do that in order

603
00:27:13.825 --> 00:27:16.605
to successfully extend their role through those initiatives.

604
00:27:17.025 --> 00:27:20.885
Um, so importantly, when employing non-disclosure, none

605
00:27:20.885 --> 00:27:23.565
of the managers that we identified at this or,

606
00:27:23.585 --> 00:27:27.365
or spoke to in the subsidiaries in our case firms went

607
00:27:27.425 --> 00:27:29.525
so far as to actually lie or

608
00:27:29.585 --> 00:27:31.525
or actively deceive headquarters.

609
00:27:31.705 --> 00:27:34.885
It, it wasn't a completely deceptive, thing

610
00:27:34.885 --> 00:27:37.805
that they engaged in, and they certainly didn't engage in

611
00:27:38.045 --> 00:27:39.165
illegal activities.

612
00:27:39.795 --> 00:27:43.325
What they did do though was just refrain from disclosing

613
00:27:43.615 --> 00:27:46.245
those assumed autonomy based initiatives,

614
00:27:46.545 --> 00:27:50.365
during the initial development so that they had enough time,

615
00:27:50.665 --> 00:27:52.965
to be able to demonstrate those key aspects

616
00:27:52.965 --> 00:27:54.045
of financial success

617
00:27:54.345 --> 00:27:57.525
and corporate alignment for headquarters managers.

618
00:27:57.565 --> 00:28:00.365
On the other hand, we highlight the importance here

619
00:28:00.365 --> 00:28:03.045
of having basically a more open-minded view

620
00:28:03.625 --> 00:28:06.325
of when subsidiaries assume autonomy,

621
00:28:06.505 --> 00:28:08.445
beyond their formally assigned levels.

622
00:28:08.945 --> 00:28:11.725
Um, and in particular we underscore sort of the value

623
00:28:11.725 --> 00:28:13.285
of headquarters managers being open

624
00:28:13.285 --> 00:28:15.205
to actually supporting these initiatives.

625
00:28:15.585 --> 00:28:17.965
Um, and, and avoiding that sort of tyranny

626
00:28:17.965 --> 00:28:20.005
of the head office that is often talked about.

627
00:28:20.425 --> 00:28:22.925
Um, given that it has been demonstrated certainly in our

628
00:28:22.925 --> 00:28:26.885
study, that those assumed autonomy based initiatives can

629
00:28:27.205 --> 00:28:29.405
actually be very successful, and

630
00:28:29.405 --> 00:28:32.725
and create positive outcomes for the multinational,

631
00:28:33.025 --> 00:28:36.725
but not without positive headquarters attention, that,

632
00:28:36.725 --> 00:28:38.485
that they really need to be supportive

633
00:28:38.865 --> 00:28:41.525
of those in subsidiary initiatives if they're

634
00:28:41.525 --> 00:28:44.405
to take advantage of and leverage the positive outcomes.

635
00:28:45.265 --> 00:28:48.445
And to be clear, we are not saying here that,

636
00:28:48.445 --> 00:28:51.325
headquarters managers should just support all forms

637
00:28:51.325 --> 00:28:54.805
of inappropriate subsidiary behavior, and,

638
00:28:54.805 --> 00:28:56.445
and that they should just go down that path.

639
00:28:56.585 --> 00:28:58.285
But instead, we are just suggesting

640
00:28:58.285 --> 00:29:00.525
that they should be a bit more open-minded,

641
00:29:00.525 --> 00:29:02.525
to those demonstrations of assumed autonomy,

642
00:29:02.895 --> 00:29:06.485
given the really quite significant potential positive

643
00:29:06.645 --> 00:29:09.085
outcomes for the wider corporation,

644
00:29:09.175 --> 00:29:12.125
which are certainly worthy of positive attention,

645
00:29:12.125 --> 00:29:14.645
that can be delivered through those displays

646
00:29:14.645 --> 00:29:15.445
of assumed autonomy.

Exploring Subsidiary Initiatives and Assumed Autonomy

00:00:00 - So, so at the core of, of this particular study, that my co-authors and I undertook, is the notion of subsidiary initiatives, which originate from the study of Birkinshaw in 97, who states that an initiative is fundamentally, an entrepreneurial process that begins, firstly with the identification of a potential opportunity for a subsidiary, and then ends with the commitment of resources towards the achievement of that opportunity. and those opportunities are typically operationalized in the form of things like new products, services,
00:00:34 - for our study, and certainly in line with the original classifications of initiatives, we view them as specific sets of actions that our case at least seek to extend the subsidiary's role within the broader multinational enterprise, perhaps. So, despite being acknowledged rather as a really important mechanism for subsidiaries to advance their role within the corporation, what we've found is that these initiatives have actually remained quite, under or relatively misunderstood,
00:01:06 - and in particular there was a real need for further research into how subsidiaries may develop those initiatives successfully. and what we also found is that the lack of clarity, regarding the development of how to successfully develop those initiatives by an a subsidiary was even further exacerbated by a series of, contradictory recent findings, which mainly centered on the per, significance of the notion that we've described as assumed autonomy.
00:01:41 - of autonomy that is assumed, hence the name, or independently developed by that subsidiary without any contribution or involvement from the head office. so in that sense, it's quite an entrepreneurial and risk-taking enterprise, by the subsidiary, that typically falls beyond their headquarters assigned authority. in that sense it's, we see it being typified all the time. we heard a lot of respondents say things like, it's easy
00:02:14 - that, that sort of view really typifies, assumed autonomy, and we see it manifesting into the establishment of things like skunks works type operations, which are typically done behind headquarters backs without them knowing. so in that way it's a really interesting notion and, and certainly contrasts quite sharply with the more traditional view of autonomy, which is one of being assigned by the headquarters to the subsidiary, sort of being given autonomy rather than
00:02:43 - and, and the, the traditional view has it very much falling within the limits of a subsidiaries authority. It's very much what they're allowed to do. what we found though is that while some subsidiary, while some findings rather have identified subsidiaries as being punished for displays of assumed autonomy, which isn't really surprising, given that it's an inherently subversive, display, an inherently sort of forbidden thing to do by the subsidiary, there's other studies which have actually

Exploring Subsidiary Initiatives and Autonomy

00:03:18 - on the basis of effectively doing the same thing. So that given the, the, the aforementioned importance of establishing an understanding of, of how subsidiaries can develop successful initiatives, we therefore sought to sort of resolve those really conflicting and confusing findings and establish a clearer picture of how, or perhaps the precise influence of assumed autonomy in that process to develop a theoretical understanding, a
00:03:49 - that I mentioned, and also to explore how subsidiaries may therefore successfully develop assumed autonomy based initiatives. we've grounded our study in the attention based view or the A BV. this particular theory has been identified by a few studies as what, what's been called the, sort of the missing link in explaining the conditions, under which certain entrepreneurial actions by subsidiary managers can actually lead to an extension of their subsidiary's role.
00:04:20 - according to the theory, attention may be viewed as sort of a, quite a meta construct that encompasses things like noticing and encoding, and then interpreting available information, and the associated directing of time and effort and resources towards that. So in the context of our study, we focused on attention that originates from the headquarters of the multinational. so within that context, attention represents the,
00:04:52 - not necessarily one manager, but the overall headquarters. and it's typically operationalized through things like the, procedural and communication channels between the headquarters and subsidiary. given all of that, a key assumption of the theory therefore, is that headquarters attention is a really scarce, it's unlimited a, a and a really critical resource, that subsidiaries need to compete for. there's unlimited amount of headquarters attention.
00:05:25 - initiatives, therefore become really important as sort of an an attention attracting mechanism. So within the A BV, there's sort of two perspectives, that, that have become quite an important within the context of our study. and, and more traditionally, at least the A BV research has, has largely focused on the assumption that headquarters is a positive thing, that it's a, it's the sort of thing that subsidiaries would want. They would have a desire for that attention,
00:05:55 - on that, most of those studies that have emphasized the link between positive headquarters attention, and the extension of the subsidiary's role, some have even identified positive headquarters attention as a necessary ingredient, in that process. so those studies that have gone down that path have really highlighted the importance of initiatives as a vital mechanism, in order to be able to track that positive attention from the headquarters.

Impacts of Corporate Attention on Subsidiary Success

00:06:27 - that those initiatives will lead to both direct and also indirect, positive attention flows, to the subsidiary. So when we talk about direct flows here, we're talking about things like routine visits, by headquarters to the subsidiary, while those more indirect flows involve things like the headquarters noticing the positive outcomes of the initiatives, like increased revenue and profitability, or potentially even things like the enhanced reputation
00:06:55 - who are instrumental in the development of those initiatives. So given all that, and perhaps unsurprisingly, given the link between initiatives and autonomy, the majority of the existing literature within the attention based view, views autonomy as very much an important factor that is at very least complimentary, or, or typically complimentary to positive headquarters attention, or at least isn't detracting from it. the A BV therefore represents a really important theoretical,
00:07:29 - that we mentioned before that highlighted subsidiaries being rewarded for, engaging in assumed autonomy, from an attention based perspective, the subsidiaries autonomous behavior in those examples is seen to attract positive attention, which typically facilitates six extension of their role. The other perspective, though that was really important here for our study, is, is that of negative attention.
00:07:59 - that have have been identified and associated with headquarters attention, some of the original theorists like Bke Bouquet and Birkinshaw have actually acknowledged that attention won't always be a good thing, certainly for subsidiaries, that there are some quite significant negative consequences that may occur, and be associated with headquarters attention. and yet despite that, most of the literature on attention, hasn't really explored those consequences.
00:08:33 - that notion of negative headquarters attention. so that's, that was a really interesting thing for us and something that we wanted to explore. further, it's important to note here that negative, headquarters attention won't always be deliberate either, that sometimes, headquarters can, can forget or unintentionally cause detrimental consequences, through their attention that they, they attribute
00:09:01 - the research that does exist in this area has, has indicated and suggested that negative headquarters attention has the potential to lead to dismissal. so, so cancellation of subsidiary initiatives, and in some cases even the removal of the subsidiaries mandate or their charter altogether. So, so potentially really significant consequences here. and that contrast, obviously, with your aforementioned literature, which has surrounded positive attention, which has been that it's, it's a great thing for subsidiaries.

Assumed Autonomy: Balancing Risks and Rewards

00:09:35 - that would not be always be the case at all. So given the, the quite subversive and, and quite risky nature of assumed autonomy, especially when it contradicts with what headquarters have told subsidiaries they should be doing, and also because of headquarters typically inherent resistance and skepticism towards anything from the subsidiary that might contradict what they've been asked to do, it follows that any displays of assumed autonomy would
00:10:06 - So given that perspective, that A BV also represents a really important theoretical explanation for those findings that identify as subsidiaries as being punished, for assuming autonomy. so, so, so overall here through the distinction between firstly positive but also negative headquarters attention, this theory is a really important explanation for the occurrence of how we can see both positive and negative consequences for assuming autonomy by subsidiaries.
00:10:41 - that certain displays of assumed autonomy would garner positive attention while others would garner and, and attract negative attention. So one of the key focuses, and perhaps the, the main focus of our study, therefore, was to extend the theory and, and to really investigate what it was that would determine whether a subsidiary would attract positive attention by assuming autonomy and what it was that would ensure or, or that would likely, ensure
00:11:10 - for doing the same thing effectively. In our study here, we utilized a multiple case study design, for the research that was both constructivist and also qualitative in nature. so when it came to the case selection for our research, we engaged with five different multinationals, and they were selected from a deliberately varied range of industries, which ended up encompassing, it mining human resource management, and also mining
00:11:42 - So that covered both manufacturing and services industry sectors. all of the parent firms of the, the companies that we spoke with here had Had to have a history of international operations in order to be appropriate for selection in our study, and had established foreign subsidiaries of varying sizes, across a range of international markets, across the globe. incorporating the, our, our decision there
00:12:12 - And as I mentioned, quite deliberate because it addressed one of the key gaps within the literature, which was that not many service firms had been highlighted, and, and focused on and discussed within this sort of body of literature. we actually included three service firms, to, in, to sort of address that limited representation that that industry sector had seen. so within each case, the respondents we required,

Understanding Subsidiary Autonomy and Headquarters Dynamics

00:12:43 - and possessed direct reporting responsibilities and communication lines between the subsidiary and the corporate headquarters, so that they had an understanding of that dynamic there. for the subsidiary managers that we interviewed, this would ensure that they had an awareness of certainly and, and likely an involvement in, any of the displays of assumed autonomy that we were looking at. while for us, senior headquarters managers that we interviewed, they would then be in a really strong
00:13:14 - that headquarters devoted to the subsidiary as a result of those initiatives. and that ultimately led to the incorporation of the five cases that I mentioned before, and all of those five cases incorporated. importantly the views of both headquarters and subsidiaries. In terms of the sources of data, we collected 19 semi-structured interviews. the interviews tended to be roughly an hour or so in length.
00:13:44 - to about an hour and a half, and they were conducted ideally in person, but of course, given the international nature of the firms involved here, a lot of them were also contacted over phone or via, platforms like Skype and Zoom. when it comes to data analysis, just briefly, we did employ the joy model here, for data analysis purposes, and also very much adopted an abductive approach so that we could sort of move back and forth between the collection of
00:14:14 - As that process flowed on the study really does reinforce the A BV as a, a key theoretical explanation for the outcomes of assumed autonomy. that distinction between positive and negative headquarters attention that I mentioned before, was really found to be absolutely key to explaining those, those conflicting findings that previous studies had highlighted. but we did also, again find that there was, in its former form, at least in, in the previous understanding of the theory, there was
00:14:50 - receiving rewards and others being punished. so in addressing that limitation of the study, we revealed three key constructs in our findings, each of which played a really important role in determining whether the subsidiary would be punished, through negative headquarters attention, or whether it would be rewarded through assumed, sorry, through positive headquarters attention. and those three constructs that we identified were subsidiary non-disclosure
00:15:20 - So I'll go through each of those in turn. So subsidiary non-disclosure first, what we found here is that before even considering, any thought or attempt of drawing positive attention towards initiatives that the subsidiaries developed, what we found was that they needed to first make sure that those initiatives didn't attract negative attention, that to even just get off the ground, they needed not to be seen as a bad thing. and, and so specifically our findings introduced

Non-Disclosure Strategies in Subsidiary Initiatives

00:15:53 - that initial negative attention. when developing the initiatives, which we termed non-disclosure, in developing that term, we sort of used it to describe any instances where a subsidiary would elect against informing headquarters of particular activities or behavior, which of course includes the development of initiatives that fall beyond its authority, and based on assumed autonomy. So our findings here also demonstrate the continuous nature
00:16:22 - It it's not black or white, it's not on or off here. what we found was that some sub, some subsidiaries would employ non-disclosure completely. they would, they would not elect, they'd elect against advising and updating headquarters, at all, while others would, would sort of drip feed bits and pieces of information that were, seemed to be crucial and, and that were necessary, but didn't still give too much away. So regardless of the extent
00:16:55 - of the core elements that remains throughout is, is that it was a very much a deliberate and a conscious decision, to refrain from raising headquarters awareness about what they were doing, in terms of those initiatives. So the resulting focused, not, the, the focus on non-disclosure therefore allow the subsidiary to develop, and implement their initiatives undisturbed. So there wasn't any interference from the head office A and that meant that they were also therefore able to avoid any negative headquarters attention.
00:17:29 - therefore was able to not only escape punishment, for sort of doing something that they weren't really supposed to be doing. certainly that was unauthorized, and but also reduces the chance of those initiatives, therefore being rejected prematurely, before it could demonstrate financial success, you know, before it could establish itself and demonstrate that there are positive outcomes. It was important that subsidiaries could sort of keep it on the down low, make sure it can develop and,
00:17:59 - and sort of, deliver on those positive outcomes for the, the overall multinational. That was non-disclosure. The second key finding that we, that we identified in this study was the need for initiative selling. so in addition to highlighting the importance of avoiding that initial negative attention through non-disclosure, our findings also highlighted that subsidiaries would at least eventually, need to attract positive headquarters attention if they wanted
00:18:32 - and so what we did in our study was adapt the notion of issue selling to the context of subsidiary initiatives here, as, and in particular, those initiatives that fell beyond the subsidiaries authority, the identification, therefore, of those initiative selling strategies, by which subsidiaries that were able to garner positive attention, from headquarters, for the initiatives that fell beyond the scope, and, and in some cases even contradicted the

Key Criteria for Positive Headquarters Attention

00:19:01 - and charter therefore constitutes a really interesting and valuable extension of our understanding of attention, within the multinational. So what we did through our findings, or what we were able to do in our findings was identify two key criteria that actually were found to increase the probability that those assumed autonomy based initiatives would attract the necessary positive attention, that the subsidiaries were looking for. And those two, two criteria were firstly,
00:19:32 - and secondly, corporate alignment. So if we, we, what we found was that if subsidiaries were able to sell their initiatives through those two criteria, if they were able to demonstrate both of those things, then that would, be able to build headquarters knowledge and understanding and awareness even of their competencies and, and actions in such a way that not only reduces, things like the information asymmetry that we typically see between headquarters and subsidiaries,
00:20:05 - that the resulting headquarters attention will be positive in nature rather than negative. here we develop the term corporate alignment to describe effectively a calibration between the initiatives and headquarters established philosophies and goals. and we've, what we found it was really, really important in attracting that positive attention. the identification of corporate alignment, is, is a key requirement here, at that, that the fact
00:20:38 - actually, because what it is effectively asking is that subsidiaries need to demonstrate that the initiatives that they've undertaken here, which go beyond their authority, and in some cases even contradict what the headquarters ask them to do, they actually need to sell them in such a way that they convince headquarters that they're in fact aligned with the corporate strategy. So that was really interesting. in terms of the findings, the final key ingredient effectively in terms
00:21:08 - and the resulting positive attention for subsidiaries when it came to their initiatives here was the issue of timing. So, so far what we've suggested is that subsidiaries need non-disclosure, but then also initiative selling of their assumed autonomy based initiatives, which initially sounds quite contradictory. How can you not tell headquarters but then also sell those same initiatives, to get the positive attention? So to resolve that apparent contradiction,
00:21:39 - as a really important factor here was this issue of timing. and more specifically, we identified that subsidiaries are best served by initially employing non-disclosure. So in those initial stages, not informing the head office so much of their initiatives, at least before they're able to be developed and implemented. so in that way they were seem to sort of buying time, so that they could provide, demonstrate those financial outcomes, which we identified as really important. Once then, they had been able to demonstrate that.

Timing and Corporate Alignment in Subsidiary Initiatives

00:22:14 - they've been able to highlight the corporate alignment of those initiatives over time. What we identified was that subsidiaries then look to sell those to headquarters so that they could then attract the positive attention, later down the track, which of course is more likely to lead to an extended role. So if you think of it in another way, and what we identified was that, if subsidiaries sell their assumed autonomy based initiatives too early, that is without
00:22:44 - then they would likely attract negative attention. but on the other hand, if the subsidiary is maintained non-disclosure of those initiatives and they never actually sold them to the head office, then they will unlikely to get the positive attention, that we identified as being really important in extending their role. So in that context, timing represents a really important and, and perhaps the key determinant of the success of those assumed autonomy based initiatives. What we identified in our study was that there are a,
00:23:18 - but also some practical implications, to come out of our work. So from a theoretical perspective, we first identified, that we're able to extend the attention based view by introducing that notion of subsidiary non-disclosure, that hadn't featured within the literature, the A BV literature previously, and builds on a sort of related notion of silence, which would, has sort of been quite prominent in the early two thousands in the literature,
00:23:48 - and, and, and we've seen that through that non-disclosure, as I mentioned, that enables subsidiaries to avoid that key negative attention that would potentially sort of, defeat their, their, their subsidiary initiative. so that's really important, in terms of its contribution to the a PV literature, because that hadn't fully recognized or acknowledged the importance of avoiding that negative attention. I mentioned previously that much
00:24:18 - things to come from, headquarters attention. so as a result that that previous literature hadn't really considered those instances, through the utilization of things like assumed autonomy where subsidiaries initiative may actually extend beyond what it had been granted authority to do, and therefore might be more likely to, to attract negative attention. So we found a way for subsidiaries to be able to avoid that and, and to, highlight the importance of that particular action from subsidiaries.
00:24:52 - the way in which we were able to identify that subsidiaries could attract positive attention from those same initiatives. and, and in this context, we advanced the work of previous authors like Dorin, backer and G Guard, who had talked about initiative selling, in the context of assumed autonomy. And as I mentioned before, we also then identified two unique and quite specific criteria, that such initiatives would, would ensure

Corporate Alignment: Balancing Non-Disclosure and Timing

00:25:22 - demonstrable financial success and corporate alignment. the requirement for corporate alignment in particular was quite a novel contribution here. given that it effectively involves subsidiaries demonstrating that those same initiatives, which by their very nature exceed the subsidiaries authority and in some cases even contravene the explicit headquarters objectives, they are in fact supportive of corporate strategy.
00:25:53 - and counterintuitive finding in that sense. the third contribution here, looks at that issue of timing, which again is quite a novel contribution, and something which hadn't been discussed in the literature here. specifically, we highlight timing as effectively a boundary condition on the ability of non-disclosure to firstly avoid that negative attention, but also on the ability of initiative selling,
00:26:23 - So without the timing being right, both of those super important previous requirements, wouldn't be sufficient to ensure a positive result for the subsidiary. So in that way, timing was seen to provide quite a unique solution, to that seemingly irreconcilable demands of firstly, non-disclosure, but then also initiative selling for those assumed autonomy based initiatives. Finally, we also did identify a, a couple of key practical contributions for managers to, so
00:26:57 - we revealed the importance of striking a key balance between non-disclosure on one hand and the subsequent selling of those initiatives. And, and it is very difficult. Not all subsidiaries were able to do it, but they needed to be able to do that in order to successfully extend their role through those initiatives. so importantly, when employing non-disclosure, none of the managers that we identified at this or, or spoke to in the subsidiaries in our case firms went
00:27:29 - or actively deceive headquarters. It, it wasn't a completely deceptive, thing that they engaged in, and they certainly didn't engage in illegal activities. What they did do though was just refrain from disclosing those assumed autonomy based initiatives, during the initial development so that they had enough time, to be able to demonstrate those key aspects of financial success and corporate alignment for headquarters managers.
00:28:00 - of having basically a more open-minded view of when subsidiaries assume autonomy, beyond their formally assigned levels. and in particular we underscore sort of the value of headquarters managers being open to actually supporting these initiatives. and, and avoiding that sort of tyranny of the head office that is often talked about. given that it has been demonstrated certainly in our study, that those assumed autonomy based initiatives can actually be very successful, and

Encouraging Support for Subsidiary Initiatives

00:28:33 - but not without positive headquarters attention, that, that they really need to be supportive of those in subsidiary initiatives if they're to take advantage of and leverage the positive outcomes. And to be clear, we are not saying here that, headquarters managers should just support all forms of inappropriate subsidiary behavior, and, and that they should just go down that path. But instead, we are just suggesting that they should be a bit more open-minded,
00:29:14 - given the really quite significant potential positive outcomes for the wider corporation, which are certainly worthy of positive attention, that can be delivered through those displays of assumed autonomy.

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