Conflict is considered a normal consequence of organizing and managing across national borders
Accelerating globalization pressures, rapidly developing emerging markets, and technological advances require multinational corporations (MNCs) to constantly adjust both their strategies and organizational structures. These organizational adjustment processes and the increasing complexity of intra-organizational coordination frequently create conflict between MNC headquarters and their foreign subsidiaries.
An important insight from our research that included more than 130 MNC HQ-Subsidiary Dyads was that boundary spanners draw from personal power instead of functional power to reduce tension and to build transnational trust. Lack of trust increases the likelihood of self-serving subsidiary behavior, including opportunism, rent seeking, and the engagement in drawn-out and costly conflict resolution processes.
[This article has been reproduced with permission from Knowledge Network, the online thought leadership platform for Thunderbird School of Global Management https://thunderbird.asu.edu/knowledge-network/]