Regional Headquarter’s Dual Agency Role: Micro‐political Strategies of Alignment and Self‐interest
| Author | Johanna Clancy,David G. Collings,Kieran M. Conroy |
| Date | 01 July 2017 |
| Published date | 01 July 2017 |
| DOI | http://doi.org/10.1111/1467-8551.12232 |
British Journal of Management, Vol. 28, 390–406 (2017)
DOI: 10.1111/1467-8551.12232
Regional Headquarter’s Dual Agency Role:
Micro-political Strategies of Alignment
and Self-interest
Kieran M. Conroy, David G. Collings1and Johanna Clancy2
Queen’s Management School, Queen’s University Belfast, Riddel Hall, 185 Stranmillis Road, Belfast, Northern
Ireland BT9 5EE, UK, 1Leadership & Talent Institute, DCU Business School, Dublin City University,
Glasnevin, Dublin 9, Ireland, and 2J. E. Cairnes School of Business & Economics, National University
of Ireland, Galway, Ireland
Corresponding author email: David.collings@dcu.ie
The increased research focus on the networked perspective of the multinational enter-
prise (MNE) reflects a greater delegation of responsibility from corporate headquarters
(CHQ) to subsidiary and intermediary units such as regional headquarters (RHQ). This
shift has increased the intensity of political interactions between key actors within the
MNE. Despite the recent rise in studies on the micro-political perspective of the MNE to
date, little empirical work has explored this issue in the context of the CHQ–RHQ re-
lationship. Drawing insights fromagency theory and micro-politics, the authors focus on
the context in which RHQs developmicro-political strategies in order to manage the flow
and exchangeof knowledge with CHQ. They show how RHQ may exhibit a ‘dual agency’
role when dealing with CHQ, in that it is characterizedas a principal and agent, each re-
quiring dierent micro-political knowledge strategies. As a principal, RHQ will develop
micro-political knowledge strategiesto increase alignment with CHQ. As an agent, RHQ
develops micro-political knowledge strategies to pursue its self-interests. Having identi-
fied dierent RHQ agency roles,the authors develop a conceptual model that outlines how
alignment and self-interest-seeking behaviours from RHQ aremanifest through dierent
micro-political knowledge strategies in its agency relationship with CHQ.
Introduction
Understanding how political interactions aect
the flow and direction of resources between
key actors within the multinational enterprise
(MNE) has been a significant question for
scholars and practitioners alike (Geppert and
Dorrenbacher, 2014; Mudambi and Navarra,
2004). The increased delegation of decision-
making responsibility from corporate headquar-
ters (CHQ) to subsidiary and intermediary units
within the MNE has resulted in an increased
focus on the micro-political interactions be-
tween these units (Geppert, Becker-Ritterspach
and Mudambi, 2016; Morgan and Kristensen,
2006). Extant research that has focused on the
CHQ–subsidiary relationship has largely failed to
consider political issues in the context of CHQ’s
relationship with integral intermediaries such
as regional headquarters (RHQ). How micro-
political strategies aect the flow of knowledge
is a problem that is not well understood in the
context of RHQ’s relationship with its CHQ
(Foss, 1997; Mahnke et al., 2012; Verbeke and
Asmussen, 2016). Knowledge is a key source of
power, and the sharing or hoarding of knowledge
may be politically motivated, depending on the
interests of key actors within the MNE (Mudambi
and Navarra, 2004). Both CHQ and RHQ may
have divergent political intentions that aect the
flow of knowledge between them. By focusing
on the micro-political strategizing of RHQ, we
© 2017 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
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RHQ’s Dual Agency Role 391
aim to understand how the political interactions
at the CHQ–RHQ interface aect the flow and
sharing of knowledge. In exploring this question,
we integrate insights from agency theory and
micro-politics in the MNE.
Agency theory is generally concerned with
the relational diculties that materialize from
the delegation of work from a principal to an
agent (Eisenhardt, 1989a). In the MNE con-
text, as a principal, CHQ delegates responsi-
bility and decision-making authority to foreign
agents, with subsidiaries generally identified as
agents (O’Donnell, 2000). As a key intermediary,
RHQ is expected to manage the flow of informa-
tion between CHQ and local subsidiaries within
the MNE (Verbeke and Asmussen, 2016). How-
ever, the RHQ may suer from role ambiguity
in that it performs dierent agency roles to the
subsidiary within the MNE (Kostova, Nell and
Hoenen, 2016). This is a significant challenge for
RHQ, as it controls in some roles (principal),
but is controlled in others (agent) (Hoenen and
Kostova, 2015; Steinberg and Kunisch, 2016). In
this sense, RHQ’s position within the MNE repre-
sents a ‘dual agency’ role, in that it may operate as
either a principal or an agent when interacting with
CHQ (Birkinshaw et al., 2016; Deutsch, Keil and
Laamanen, 2011; Nell, Ambos and Schlegelmilch,
2011). Performing this dual agency role in an ef-
fective manner requires RHQ to engage in micro-
political strategies with CHQ. Regionalheadquar-
ters may develop micro-political strategies in an
attempt to temper CHQ’s desire to maintain con-
trol and alignment, in opposition to their own de-
sire to be as autonomous as possible (Kristensen
and Zeitlin, 2005). An agency lens is therefore ap-
propriate for our study, as it emphasizes relational
issues of alignment and self-interest between key
actors (Hoenen and Kostova, 2015; Kostova, Nell
and Hoenen, 2016).
The political interactions that take place within
these agency relationships have been labelled
micro-politics (Kristensen and Zeitlin, 2005;
Morgan and Kristensen, 2006). Extant research
has focused mainly on the types of micro-politics
within the CHQ–subsidiary relationship that
arise as a result of budget allocations, relocation
decisions, mandate changes (Dorrenbacher and
Gammelgaard, 2006) and the transfer of employ-
ment practices (Ferner, Edwards and Tempel,
2012). The role of agency and micro-politics and
their eects on knowledge flows, in particular
between CHQ and RHQ, is less well documented
(Geppert and Dorrenbacher, 2014). Knowledge
flows are a key determinant of bargaining power
(Mudambi and Navarra, 2004), and therefore
how and why knowledge is shared and exchanged
within the MNE is a politically motivated activity
(Geppert, Becker-Ritterspach and Mudambi,
2016). This foregrounds the need to explore the
micro-political interactions related to knowledge
control between CHQ and RHQ.
Our findings illustrate that the delegation of
authority from CHQ to RHQ creates a series
of tensions around whether the RHQ will re-
main aligned with the CHQ or potentially pur-
sue their self-interests. We find that RHQ ex-
hibits a ‘dual agency’ role in interacting with
CHQ, in that it may be characterized as both
a principal and agent. As a principal, RHQ
develops micro-political knowledge strategies to
increase alignment with CHQ. However, as an
agent, RHQ develops micro-political knowledge
strategies to pursue its self-interest. Building
on recent literature focused on micro-politics
(Morgan and Kristensen, 2006; Geppert and
Dorrenbacher, 2014; Geppert et al, 2016) and the
agency theory perspective of the MNE (Hoenen
and Kostova, 2015; Kostova, Nell and Hoenen,
2016; Steinberg and Kunisch, 2016), we develop
a conceptual model which explicates the dierent
agency roles RHQ assumes in its relationship with
CHQ and the associated micro-political knowl-
edge strategies.The main contribution of our study
lies in illuminating how micro-political strategies
in relation to the flow of knowledgeare key for bal-
ancing alignment and self-interest at RHQ level.
Weexplore the aforementioned issues through case
study analysis of twoEuropean RHQs of MNEs in
the medical devices industry.
The paper proceeds as follows; the next section
introduces the theoretical underpinnings of our
study. The methods are subsequently detailed be-
fore a discussion of the findings and an outline of
the key contributions of the study. We conclude
with a consideration of the limitations of the study
and potential avenues for further study.
Micro-politics in the MNE
The MNE is increasingly understood as a ‘con-
tested terrain’ characterized by political interac-
tions and conflicts between key actors (Clegg,
© 2017 British Academy of Management.
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