Intrafirm Competition in Multinational Corporations: Towards a Political Framework

Abstract

Intrafirm competition is one of the most contentious issues in multinational companies (MNCs). It occurs when different subsidiaries of an MNC overlap with regard to products, markets or technologies and headquarters try to make use of this overlap by coercive comparisons. It also occurs when a subsidiary takes an initiative that challenges an existing mandate of another subsidiary. Despite the large potential for conflict in intrafirm competition, neither the literature on intrafirm competition nor the more extensive literature on subsidiary mandate change has paid systematic attention to the political dimension of intrafirm competition. Therefore, a political framework to study intrafirm competition is developed in this paper, drawing on classical organisational politics approaches. The focus of this framework is on core actors in intrafirm competition, i.e. headquarters and subsidiary executives, their interest-based strategies, and their interaction in micro-political games evolving around intrafirm competition.