Headquarters of multinational corporations can be involved in their subsidiaries and help with the development and transfer of innovative ideas. However, headquarters involvement might not always be desired or needed, and it can thus be perceived as interference with local activities, potentially reducing local willingness to go the extra mile. We address the lack of knowledge about subsidiary manager behavior by answering the following question: How does headquarters involvement influence the proactive behavior of subsidiary managers to push for new and innovative ideas? Using data from 120 top managers in subsidiaries of multinational corporations, we find that the negative relationship between headquarters involvement and their subsidiary managers' support for initiatives can be reduced when socialization mechanisms such as a common corporate culture or rotation programs are put in place.

Attention of top managers has an impact on future direction of an organization according to the attention-based view of the firm. In the context of multinational corporations, headquarters’ attention is likely to influence the actions and behavior of subsidiaries. Thus, in the thesis, I respond to calls for more research on this topic: enhancing the understanding about how a subsidiary’s perception of headquarters’ attention relates to its choice of communication moves when sharing business ideas with headquarters (also known as subsidiary voice). In recent research, subsidiary voice is viewed as a bottom-up tool for subsidiaries to attract headquarters’ attention to issues that they consider important for their local units and the entire organization. In line with the research purpose, the data were collected at the subsidiary level through a combination of both, survey and interviews. The findings based on empirical data point out that a subsidiary’s perception of headquarters’ attention engagement has a positive impact on its voice. This means that subsidiaries not having regular interaction with headquarters are unable to select communication moves that can attract headquarters’ attention and hence encounter challenges in adopting an initiative-taking approach to gain influence or a central position in the organization. As a result, contrary to the claims put forth in recent research, the thesis findings highlight that subsidiary voice alone is not enough to attract headquarters’ attention. Instead, subsidiaries can only use their voice when they have power (also called weight) to influence headquarters’ attention and decisions. This gives rise to an unequal playing field because subsidiaries that lack considerable weight are unable to contribute to strategy formulation and future planning done by the headquarters, with regard to their own units and the organization in general. On the contrary, subsidiaries with a considerable weight experience a high degree of attention engagement from the headquarters and thus find it easier to attract headquarters’ attention for their business ideas.

Multiple customer needs and rapid technological change are what MNCs are confronted with, thus, they rely on subsidiaries responding to local market needs. The ability of subsidiaries to integrate resources to respond to market opportunities determines its competitiveness, and contributes to whole corporate. The purpose of this dissertation is to construct an integrative framework toward generating subsidiary initiatives and competitiveness. Structural equation modeling was employed to verify the conceptual framework. Based on the results of SEM, entrepreneurial leadership of top management teams enhances the talent on the process of human-capital leveraging to facilitate them to be creative and agile; further, promote collective learning among members. Additionally, with the support of top management teams, learning culture of subsidiaries can be strengthened. Support of top management team, human-capital leveraging and learning culture, improve the absorptive capacity, further, they promote subsidiary initiatives and competitiveness.

Research background: Digitization, technological advancements, such as AI, the global customer base and varying ownership structures can be seen as a few of the largest challenges that contemporary international MNEs face with regards to their internal operations. Such disruptive factors require firms to be innovative in their products, services, and operations, to retain a competitive advantage and thrive in the international markets – at the foundation of which lies having an entrepreneurial orientation (EO). This is applicable not only to HQs, but also to subsidiaries, which possess the local knowledge needed to succeed in that market. From this, the whole MNE can and should benefit, enabled through effective diffusion of initiatives – realizable through central roll-out from the HQ.  Research purpose: This study explores how HQs behave when faced with initiatives from their foreign subsidiaries. The main goal of this study is to identify behavioural patterns and how this influences the ultimate decision-making of the HQ. This study aims to join the discussion on HQ-subsidiary relationships with regards to initiative realization. The growing interest in research on the role of HQs in contemporary MNEs, the lack of research on central initiative realization, and the centralization of knowledge at HQ are fundamental to this study.  Research question: What internal organizational factors influence HQs’ decisions on the central realization of their foreign subsidiaries’ initiatives?  Research method: This thesis is based on the research paradigm of relativistic ontology and social constructionist epistemology, meaning reality is shaped by people and their observations. I adopted an explorative, holistic, single-case study design of a Dutch MNE with subsidiaries in Germany and Sweden. I used the approach of heterogeneous purposive sampling, denoting various inclusion criteria beforehand. In total, I conducted seventeen interviews. The collected data was consequently analyzed using the principles of the template approach.  Conclusion: The findings are consolidated in a conceptual model (see Figure 2) that denotes knowledge sharing and autonomy as the direct internal influences on the HQ’s decision to centrally realize foreign subsidiaries’ initiatives. These effects are moderated by managerial and HQ intentionality, the pursuit of a common strategy, trust as a dual relationship, the perceptions of alignment of organizational culture and the subsidiary’s motivation to engage in initiatives.

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