Differentiated fit and shared values: Alternatives for managing headquarters‐subsidiary relations

Nitin Nohria and Sumantra Ghoshal

Strategic Management Journal, 1994, vol. 15, issue 6, 491-502

Abstract: This paper elaborates and provides empirical support for two different approaches to managing the nexus of headquarters subsidiary relations in a multinational corporation (MNC). The first approach is that of Differentiated Fit. We show that the extent to which an MNC differentiates the formal structure of its headquarters subsidiary relations to fit the contexts of its various subsidiaries, the better the performance of the MNC as a whole. The second approach is that of Shared Values. We show that a high degree of shared values among the headquarters and subsidiaries is another approach to governing headquarterssubsidiary relation that enhances the performance of the MNC. We further maintain that differentiated fit and shared values, while being alternatives, are not mutually exclusive ways of effectively managing headquarters subsidiary relations. Indeed, MNCs that can simultaneously implement these two approaches have the best relative performance.

Date: 1994
References: Add references at CitEc
Citations: View citations in EconPapers (142)

Downloads: (external link)
https://doi.org/10.1002/smj.4250150606

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:stratm:v:15:y:1994:i:6:p:491-502

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0143-2095

Access Statistics for this article

More articles in Strategic Management Journal from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().