The MNC literature treats the (parent) HQ as entirely benevolent with respect to their
perceived and actual intentions when they intervene at lower levels of the MNC.
However, HQ may intervene in subsidiaries in ways that demotivate subsidiary
employees and managers (and therefore harm value-creation). This may happen even if
such intervention is benevolent in its intentions. We argue that the movement away
from more traditional hierarchical forms of the MNC and towards network MNCs
placed in more dynamic environments gives rise to more occasions for potentially
harmful intervention by HQ. Network MNCs should therefore be particularly careful to
anticipate and take precautions against “intervention hazards.” Following earlier
research, we point to the role of normative integration and procedural justice, but argue
that they also serve to control harmful HQ intervention (and not just subsidiary
opportunism).
