Dual Headquarters Involvement in Subsidiary Innovation

The strategy and international business literature has identified the overall potential for headquarters to add value by allocating resources to subsidiary activities, but little is known about the extent to which multiple headquarters simultaneously involves itself in subsidiary operations. The current paper takes on this neglected question by empirically investigating corporate and divisional headquarters direct involvement in innovation development projects at the subsidiary level. Analyses that draw upon 85 innovation development projects in 23 multinational enterprises reveal that dual innovation importance, i.e., an innovation that is important for the division and the corporate level, drives dual headquarters involvement in innovation development. Contrary to expectations, no significant effect of dual embeddedness on dual headquarters involvement is found. The network size of the developing subsidiary positively moderates the two aforementioned effects on dual headquarters involvement in innovation development. The results lend support for the notion that parenting in complex structures entails complex headquarters structures. Thus, the results question simplistic views on headquarters. It appears that multiple headquarters do get involved in specific subsidiary activities and that the theoretical advancements on headquarters should be discussed in the context of their complexity to reflect the
nature of the contemporary multinational enterprise.