Headquarters–subsidiary relationships and the country-of-origin effect

Abstract

Purpose – Multinational corporations (MNCs) are often presented as harbingers of global practices, thus promoting a process of convergence between different national business systems. However, this view disregards the fact that MNCs, too, are rooted in countries of origin, and that this may have an enduring influence on the practices employed within these organizations. This chapter aims to throw new light upon this issue.

Methodology – Using a survey methodology we compare company practices for around 150 MNC subsidiaries from four different countries (the USA, the UK, Germany, and Japan) at two points of time (1995 and 2002).

Findings – Our findings show that even the most internationalized companies in the world continue to show unique country patterns. In particular, strong differences between US and Japanese MNCs endure. However, MNCs from the US and from the UK, already very similar in 1995, have become even more alike in 2002. German MNCs show an interesting picture. While remaining similar to Japanese MNCs (and very different from their US and UK counterparts), in some limited respects German MNCs seem to have adapted to the US/UK practices.

Originality – Previous studies, focusing at different groups of countries and different practices, and conducted at various points in time, have been insufficiently cumulative to form a basis for firm conclusions. This study provides a systematic comparison of MNC company practices at two points in time.

Citation

Harzing, A.-W. and Noorderhaven, N. (2008), "Headquarters–subsidiary relationships and the country-of-origin effect", Feldman, M.P. and Santangelo, G.D. (Ed.) New Perspectives in International Business Research (Progress in International Business Research, Vol. 3), Emerald Group Publishing Limited, Leeds, pp. 13-40. https://doi.org/10.1016/S1745-8862(08)03002-1