Headquarters–Subsidiary Relationships during Dramatic Strategic Changes—The Local Implementation of a Global Merger between MNCs in India

This article, using an in-depth single case study approach, studies the local integration process between two globally merging multinational companies’ (MNCs) subsidiaries in India. The focus is on the interplay between the parent company and the subsidiary level during the local implementation of such a global strategic decision. The article shows that the parent company does not in detail coordinate and control the local implementation due to (a) an in-beforehand strictly defined framework and (b) the existing vacuum in MNC internal values and norms. The article further suggests that the strategic importance of a subsidiary’s market is positively and the degree of perceived resemblance between the parent’s home country and the subsidiary’s local environment is negatively related to the degree of parental involvement. Finally, the article suggests that subsidiaries’ reactions towards parental involvement are influenced by: (a) the type of involvement/coordination mechanisms used, (b) the local institutional environment and (c) the relational context.