Case C: How Subsidiaries Attempt to Direct HQ Attention to New Business Opportunities

We examine how subsidiaries of multinational companies communicate with headquarters about business opportunities they perceive in their local environment. Our aim is to provide in-depth insights into how communication is used to attract the attention of headquarters.

We study four communication processes of opportunities recognised by subsidiary managers in four different units within the same multinational corporation.

We find that communication is influenced by the subsidiaries’ perception of their relationship with headquarters. Importantly, we find that subsidiaries in emerging countries show different communication patterns than those in advanced markets. Our results further point out that multinationals from advanced countries face the challenge to respond to the increased salience of opportunities from emerging economies, while at the same time still working within existing communication patterns and structures that are not adapted to this new situation.

Our study presents communication processes within multinationals beyond the frequency of communication, including a variety of aspects of communication. Doing so, we are able to point out that open communication is not achieved with all subsidiaries, and what is worse, seems most of all to be challenged for subsidiaries in emerging markets, risking promising business opportunities in these markets.