Strategy implementation in large multinational enterprises represents a significant managerial and organizational challenge. In simple terms, while the HQ can be seen as a central unit that formulates strategy, the typical role of middle management and its subordinates is to implement it through their actions. However, in response to changing circumstances the HQ needs to continuously adapt its strategic direction and to intervene in subunits to adjust the approach.

Although HQ intervention in a subunit (i.e. overruling its decisions) has been predominantly associated with negative consequences for motivation and thus commitment to implement strategy, Phillip Nell and his co-authors Michael Glock, Nicolai Foss, and Torben Pedersen investigate how intervention can promote strategy implementation. Using data from one large multi-business firm, they find evidence that an overall organizational climate of intervention has a positive impact on strategy implementation by subunits.

Their novel insights pave the way for further research on HQ interventions to unravel complex consequences of intervention for the subunits´ strategy implementation. The results will help practitioners fine-tune their intervention approach, leading to a more effective execution of strategies.

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Reference

Glock, M.; Foss, N.J.; Nell, P. C.; Pedersen, T. 2021. Facets of intervention - The effects of headquarters intervention on subunit strategy implementation. Working paper.

Related papers by HiA authors

Foss, K., Foss, N. J., & Nell, P. C. (2012). MNC organizational form and subsidiary motivation problems: Controlling intervention hazards in the network MNC. Journal of International Management, 18(3), 247-259. MNC organizational form and subsidiary motivation problems: Controlling intervention hazards in the network MNC - ScienceDirect

Asmussen, C. G., Foss, N. J., & Nell, P. C. (2019). The role of procedural justice for global strategy and subsidiary initiatives. Global Strategy Journal, 9(4), 527-554. The role of procedural justice for global strategy and subsidiary initiatives (wiley.com)

Nell, P. C., Foss, N. J., Klein, P. G., & Schmitt, J. (2021). Avoiding digitalization traps: Tools for top managers. Business Horizons, 64(2), 163-169. Avoiding digitalization traps: Tools for top managers - ScienceDirect