In this paper we contribute to knowledge of power and politics in international business by developing the understanding of the role of discourse and sensemaking in the subsidiary–headquarters relationship. Based on an ethnographic action research study in a British subsidiary of an American multinational corporation, we conduct an ethnomethodologically informed discourse analysis of the accounts, stories and metaphors through which power and politics in the subsidiary–headquarters relationship were created as social facts. We then broaden the analytic frame to trace longitudinally how these facts led the subsidiary managers to hide, dilute or restrict their ‘local sense’ from the headquarters, including their knowledge of the local market and their preferred strategic direction for the firm: a process we term sense-censoring. We reveal how the subsidiary used power and politics as reasoning procedures to decide against pursuing a preferred course of action, despite a strongly held belief to the contrary, due to anticipated reactions or counter-actions, thereby transforming potential strategic action into inaction. Sense-censoring is significant for international business management, we propose, because it impacts upon knowledge flows, innovation diffusion and organizational learning. We conclude by outlining the implications of systems of sense-censoring and strategic inaction for the management of global–local relations in multinational corporations.
AnderssonU.ForsgrenM.HolmU. (2007). Balancing subsidiary influence in the federative MNC: A business network view. Journal of International Business Studies, 38, 802–818.
2.
AntakiC. (1994). Explaining and arguing: The social organization of accounts. London: SAGE Publications.
3.
BalogunJ.JohnsonG. (2004) Organizational restructuring and middle manager sensemaking. Academy of Management Journal, 47, 523–549.
4.
BalogunJ.JohnsonG. (2005). From intended strategies to unintended outcomes: The impact of change recipient sensemaking, Organization Studies, 26, 1573–1601.
5.
BalogunJ.JarzabkowskiP.VaaraE. (2011). Selling, resistance and reconciliation: A critical discursive approach to subsidiary role evolution in MNEs. Journal of International Business Studies, 42, 765–786.
6.
BaunsgaardV. V.CleggS. (2013). ‘Walls or boxes’: The effects of professional identity, power and rationality on strategies for cross-functional integration. Organization Studies, 34, 1299–1325.
7.
Becker-RitterspachF. A. A. (2006). The social constitution of knowledge integration in MNEs: A theoretical framework. Journal of International Management, 12, 358–377.
8.
Becker-RitterspachF. A. A.DörrenbächerC. (2011). An organizational politics perspective on intra-firm competition in multinational corporations. Management International Review, 51, 533–559.
9.
BirkinshawJ.HoodN. (1998). Multinational subsidiary evolution: Capability and charter change in foreign-owned subsidiary companies. Academy of Management Review, 23, 773–795.
10.
BirkinshawJ.HolmU.ThileniusP.ArvidssonN. (2000). Consequences of perception gaps in the headquarters–subsidiary relationship. International Business Review, 9, 321–344.
11.
BlazejewskiS.Becker-RitterspachF. (2011). Conflict in headquarters–subsidiary relations: A critical literature review and new directions. In DörrenbächerC.GeppertM. (Eds.), Politics and power in the multinational corporation: The role of institutions, interests and identities (pp. 139–190). Cambridge: Cambridge University Press.
12.
BodenD. (1994). The business of talk: Organizations in action. Cambridge: Polity Press.
13.
BojeD. M. (1991). The storytelling organization: A study of story performance in an office-supply firm. Administrative Science Quarterly, 36, 106–126.
14.
BolanderP.SandbergJ. (2013). How employee selection decisions are made in practice. Organization Studies, 34, 285–311.
15.
BookerC. (2004). The seven basic plots: Why we tell stories. Bloomsbury Publishing.
16.
BouquetC.BirkinshawJ. (2008a). Weight versus voice: How foreign subsidiaries gain attention from corporate headquarters. Academy of Management Journal, 51, 577–601.
17.
BouquetC.BirkinshawJ. (2008b). Managing power in the multinational corporation: How low-power actors gain influence. Journal of Management, 34, 477–508.
18.
BoussebaaM.MorganG.SturdyA. (2012). Constructing global firms? National, transnational and neocolonial effects in international management consultancies. Organization Studies, 33, 465–486.
19.
BuchananD. A.BadhamR. (1999). Power, politics and organisational change: Winning the turf game. London: SAGE Publications.
ChiniT.AmbosB.WehleK. (2005). The headquarters-subsidiaries trench: Tracing perception gaps within the multinational corporation. European Management Journal, 23, 145–153.
23.
ClarkE.GeppertM. (2011). Subsidiary integration as identity construction and institution building: A political sensemaking approach. Journal of Management Studies, 48, 395–416.
24.
CornelissenJ. P.KafourosM. I. (2008). The emergent organization: Primary and complex metaphors in theorizing about organizations. Organization Studies, 29, 957–978.
25.
CreedW. D.LangstraatJ. A.ScullyM. A. (2002). A picture of the frame: Frame analysis as technique and as politics. Organizational Research Methods, 5(1), 34–55.
26.
CzarniawskaB. (2004). Narratives in social science research. London: SAGE Publications.
27.
DenningS. (2006). Effective storytelling: Strategic business narrative techniques. Strategy and Leadership, 34, 42–48.
28.
DörrenbächerC.GammelgaardJ. (2006). Subsidiary role development: The effect of micro-political headquarters–subsidiary negotiations on the product, market and value-added scope of foreign-owned subsidiaries. Journal of International Management, 12, 266–283.
29.
DörrenbächerC.GammelgaardJ. (2011). Conflicts in headquarters–subsidiary relationships: Headquarters-driven charter losses in foreign subsidiaries. In: DörrenbächerC.GeppertM. (Eds.), Politics and power in the multinational corporation: The role of institutions, interests and identities (pp. 231–254). Cambridge: Cambridge University Press.
30.
DörrenbächerC.GeppertM. (2006). Micro-politics and conflicts in multinational corporations: Current debates, re-framing, and contributions of this special issue. Journal of International Management, 12, 251–265.
31.
DörrenbächerC.GeppertM. (Eds.). (2011). Politics and power in the multinational corporation: The role of institutions, interests and identities. Cambridge University Press.
32.
DozY.PrahaladC. K. (1984). Patterns of strategic control within MNCs. Journal of International Business Studies, 15(2), 55–72.
33.
DuttonJ. E.AshfordS. J.O’NeillR. M.LawrenceK. A. (2001). Moves that matter: Issue selling and organizational change. Academy of Management Journal, 44, 716–736.
34.
EdwardsD (1997). Discourse and cognition. London: SAGE Publications.
EdwardsP.BélangerJ. (2009). The multinational firm as a contested terrain. In CollinsonDMorganG. (Eds.), The multinational firm (pp. 193–216). Chichester, UK: Wiley-Blackwell.
37.
FairhurstG. T. (2010). The power of framing: Creating the language of leadership (Vol. 290). New York: Jossey-Bass.
38.
FernerA. (2000). The underpinnings of ‘bureaucratic’ control systems: HRM in European multinationals. Journal of Management Studies, 37, 521–539.
39.
FernerA.EdwardsP. (1995). Power and the diffusion of organizational change within multinational enterprises. European Journal of Industrial Relations, 1(2), 229–257.
40.
FissP. C.HirschP. M. (2005). The discourse of globalization: Framing and sensemaking of an emerging concept. American Sociological Review, 70, 29–52.
41.
GephartR. P. (1978). Status degradation and organizational succession: An ethno- methodological approach. Administrative Science Quarterly, 23, 553–581.
42.
GephartR. P.TopalC.ZhangZ. (2010). Future-oriented sensemaking: Temporalities and institutional legitimation. In HernesT.MaitlisS. (Eds.), Process, sensemaking, and organizing (pp. 275–311). Oxford: Oxford University Press.
43.
GeppertM. (2003). Sensemaking and politics in MNCs: A comparative analysis of vocabularies within the global manufacturing discourse in one industrial sector. Journal of Management Inquiry, 12, 312–329.
44.
GeppertM.DörrenbächerC. (2011). Politics and power in the multinational corporation: An introduction. In: DörrenbächerC.GeppertM. (Eds.), Politics and power in the multinational corporation: The role of institutions, interests and identities (pp. 3–38). Cambridge: Cambridge University Press.
45.
GeppertM.WilliamsK. (2006). Global, national and local practices in multinational corporations: Towards a socio-political framework. International Journal of Human Resource Management, 17, 49–69.
46.
GhoshalS.WestneyD. E. (Eds.) (2003). Organization theory and the multinational corporation. London: Palgrave Macmillan.
47.
GioiaD. A.ChittipeddiK. (1991). Sensemaking and sensegiving in strategic change initiation. Strategic Management Journal, 12, 433–448.
48.
GioiaD. A.MehraA. (1996). Review ofSensemaking in organizations. Academy of Management Review, 21, 1226–1230.
49.
GioiaD. A.CorleyK. G.FabbriT. M. (2002). Revising the past (while thinking in the future perfect tense). Journal of Organizational Change Management, 15, 622–634.
50.
GoffmanE. (1971 [1959]). The presentation of self in everyday life. Harmondsworth, UK: Pelican Books.
51.
GrantD.OswickC. (Eds.) (1996). Metaphor and organizations. London: SAGE Publications.
52.
GretoM.SchotterA.TeagardenM. (2010). Toyota: The accelerator crisis. Thunderbird School of Global Management. Case No: A09–10–0011.
53.
GunnJ.ChenS. (2006). A micro-political perspective of strategic management. In Vigoda-GadotE.DroryA. (Eds.), Handbook of organizational politics (pp. 209–229). Cheltenham, UK: Edward Elgar Publishing.
54.
HardyC.CleggS. R. (1996). Some dare call it power. In CleggS. R.HardyC.NordW. R. (Eds.), Handbook of organization studies (pp. 622–641). London: SAGE Publications.
55.
HardyC.PalmerI.PhillipsN. (2000) Discourse as a strategic resource. Human Relations, 53, 1227–1247.
56.
HughesJ.RandallD.RouncefieldM.TolmieP. (2012) Meetings and the accomplishment of organization. In RouncefieldM.TolmieP. (Eds.), Ethnomethodology at work. London: Ashgate.
57.
HymerS. H. (1979). The multinational corporation: A radical approach. Cambridge: Cambridge University Press.
58.
JarzabkowskiP.BalogunJ. (2009). The practice and process of delivering integration through strategic planning. Journal of Management Studies, 46, 1255–1288.
59.
JarzabkowskiP.WilsonD. C. (2002). Top teams and strategy in a UK university. Journal of Management Studies, 39, 355–381.
60.
KacmarK. M.BozemanD. P.CarlsonD. S.AnthonyW. P. (1999). An examination of the perceptions of organizational politics model: Replication and extension. Human Relations, 52, 383–416.
61.
KostovaT.RothK.DacinM. T. (2008). Institutional theory in the study of multinational corporations: A critique and new directions. Academy of Management Review, 33, 994–1006.
62.
Krause-JensenJ. (2010). Flexible firm. New York, Oxford: Berghahn Books.
63.
KristensenP. H.MorganG. (2006). The contested space of multinationals: Varieties of institutionalism, varieties of capitalism. Human Relations, 59, 1467–1490.
64.
KristensenP. H.ZeitlinJ. (2005). Local players in global games: The strategic constitution of a multinational corporation. Oxford: Oxford University Press.
65.
LakoffG.JohnsonM. (1980). Metaphors we live by. Chicago: University of Chicago Press.
66.
LeiterK. (1980). A primer on ethnomethodology. New York: Oxford University Press.
67.
LingY.FloydS.BaldridgeD. (2005). Toward a model of issue selling by subsidiary managers in multinational organizations. Journal of International Business Studies, 36, 637–654.
68.
LlewellynN.SpenceL. (2009). Practice as a members’ phenomenon. Organization Studies, 30, 1419–1439.
69.
LukesS (2005). Power: A radical view. New York: Palgrave Macmillan.
70.
MaitlisS. (2005). The social processes of organizational sensemaking, Academy of Management Journal, 48, 21–49.
71.
MaitlisS.ChristiansonM. (2014). Sensemaking in organizations: Taking stock and moving forward. Academy of Management Annals, 8, 57–125.
72.
MaitlisS.LawrenceT. (2003). Orchestral manoeuvres in the dark: Understanding failure in organizational strategizing. Journal of Management Studies, 40, 109–139.
73.
MaitlisS.LawrenceT. (2007). Triggers and enablers of sensegiving in organizations. Academy of Management Journal, 50, 57–84.
74.
MantereS.SchildtH. A.SillinceJ. A. (2012). Reversal of strategic change. Academy of Management Journal, 55, 172–196.
75.
MazzarellaW. (2003). Shoveling smoke: Advertising and globalization in contemporary India. Durham and London: Duke University Press.
76.
MeyerK. E.MudambiR.NarulaR. (2011). Multinational enterprises and local contexts: The opportunities and challenges of multiple embeddedness. Journal of Management Studies, 48, 235–252.
77.
MoeranB. (2009). From participant observation to observant participation. In YbemaS.YanowD.WelsH.KamsteegF. (Eds.), Organizational ethnography: Studying the complexities of everyday life (pp. 139–155). London: SAGE Publications.
78.
MoermanM. (1988). Talking culture: Ethnography and conversation analysis. Philadelphia: University of Pennsylvania Press.
79.
MoninP.NoorderhavenN.VaaraE.KroonD. (2013). Giving sense to and making sense of justice in a post-merger integration. Academy of Management Journal, 56, 256–284.
80.
MorganG (1986). Images of organization. Newbury Park, CA: SAGE Publications.
81.
MorganG. (2001). The multinational firm: Organizing across institutional and national divides. In MorganG.KristensenP. H.WhitleyR. (Eds.), The multinational firm: Organizing across institutional and national divides (pp. 1–26). Oxford: Oxford University Press.
82.
MudambiR. (2011). Hierarchy, coordination, and innovation in the multinational enterprise. Global Strategy Journal, 1, 317–323.
83.
MudambiR.NavarraP. (2004). Is knowledge power? Knowledge flows, subsidiary power and rent-seeking within MNCs. Journal of International Business Studies, 35, 385–406.
84.
MuellerF. (1996). National stakeholders in the global contest for corporate investment. European Journal of Industrial Relations, 2, 345–368.
85.
ParoutisS.HeracleousL. (2013). Discourse revisited: Dimensions and employment of first-order strategy discourse during institutional adoption. Strategic Management Journal, 28, 459–473.
86.
PettigrewA. M.WoodmanR. W.CameronK. S. (2001). Studying organizational change and development: Challenges for future research. Academy of Management Journal, 44, 697–713.
87.
PfefferJ. (2010). Power: Why some people have it – and others don’t. New York: HarperCollins.
88.
PitsisT.CleggS.MarosszekyM.Rura-PolleyT. (2003). Constructing the Olympic dream: A future perfect strategy of project management. Organization Science, 14, 574–590.
89.
PotterJ. (1996). Representing reality: Discourse, rhetoric and social construction. London: SAGE Publications.
90.
PotterJ.WetherellM. (1987). Discourse and social psychology: Beyond attitudes and behaviour. London: SAGE Publications.
91.
PrahaladC. K.DozY. (1981). An approach to strategic control in multinational companies. Sloan Management Review, 22(4), 5–13.
92.
RouleauL.BalogunJ. (2011) Middle managers, strategic sensemaking and discursive competence. Journal of Management Studies, 48, 953–983.
93.
RugmanA. M. (2005) The regional multinationals: MNEs and ‘global’ strategic management. Cambridge: Cambridge University Press.
94.
Samra-FredericksD. (2003) Strategizing as lived experience and strategists’ everyday efforts to shape strategic direction. Journal of Management Studies, 40, 141–174.
95.
SandbergJTsoukasH (2011). Grasping the logic of practice: Theorizing through practical rationality. Academy of Management Review, 36, 338–360.
96.
SchotterA.BeamishP. W. (2011). Performance effects of MNC headquarters–subsidiary conflict and the role of boundary spanners: The case of headquarter initiative rejection. Journal of International Management, 17, 243–259.
97.
SuddabyR.FosterW. M.TrankC. Q. (2010). Rhetorical history as a source of competitive advantage. In BaumJ. A. C.LampelJ. (Eds.), The globalization of strategy research (pp. 147–173). Bingley, UK: Emerald Group Publishing Limited.
98.
TaplinI. (2006). Strategic change and organisational restructuring: How managers negotiate change initiatives. Journal of International Management, 12, 284–301.
99.
ThomasW. I. (2002). The definition of the situation. In Nathan Rousseau (Ed.), Self, symbols, and society: Classic readings in social psychology (pp. 103–115). Lanham, MD: Rowman & Littlefield.
100.
TienariJ.VaaraE. (2011). On the narrative construction of multinational corporations: An antenarrative analysis of legitimation and resistance in a cross-border merger. Organization Science, 22, 370–390.
101.
VaaraE. (2002). On the discursive construction of success/failure in narratives of post-merger integration. Organization Studies, 23, 211–248.
102.
VaaraE.MoninP. (2010). A recursive perspective on discursive legitimation and organizational action in mergers and acquisitions. Organization Science, 21(10), 3–22.
103.
VaaraE.TienariJ. (2008). A discursive perspective on legitimation strategies in MNCs. Academy of Management Review, 33, 985–993.
104.
VaaraE.TienariJ.LaurilaJ. (2006). Pulp and paper fiction: On the discursive legitimation of global industrial restructuring. Organization Studies, 27, 789–813.
105.
WeberK.GlynnM. A. (2006). Making sense with institutions: Context, thought and action in Karl Weick’s theory. Organization Studies, 27, 1639–1660.
106.
WeberM. (1978). Economy and society. Two-volume set. RothGuentherWittichClaus (Eds.). Berkeley: University of California Press.
107.
WhittleA.HousleyW.GilchristA.MuellerF.LenneyP. (2014). Power, politics and organizational communication: An ethnomethodological perspective. In: CoorenF.VaaraE.LangleyA.TsoukasH. (Eds.), Language and communication at work: Discourse, narrativity, and organizing (pp. 71–94). Oxford: Oxford University Press.
108.
WilliamsC. (2011). Subsidiary manager socio-political interaction: The impact of host country culture. In DörrenbächerC.GeppertM. (Eds.), Politics and power in the multinational corporation: The role of institutions, interests and identities (pp. 283–314). Cambridge: Cambridge University Press.
109.
WillmottH. (2013). Reflections on the darker side of conventional power analytics. Academy of Management Perspectives, 27, 281–286.
110.
WrightS. (1994). ‘Culture’ In anthropology and organizational studies. In WrightS. (Ed.), Anthropology of organizations (pp. 1–31). London: Routledge.
111.
YaminM.ForsgrenM. (2006). Hymer’s analysis of the multinational organization: Power retention and the demise of the federative MNE. International Business Review, 15, 166–179.
112.
YaminM.GhauriP. (2010). A critical assessment of the business network perspective on HQ control in multinational companies. In AnderssonU.HolmU. (Eds.), Managing the contemporary multinational corporation (pp. 125–137). Cheltenham, UK: Edward Elgar.
113.
ZbarackiM. J. (1998). The rhetoric and reality of total quality management. Administrative Science Quarterly, 43, 602–636.
114.
ZipesJ. (2012). Fairy tales and the art of subversion. London: Routledge.
