Abstract
The purpose of this study was to understand different organizational structures that headquarters use as a controlling mechanism to manage their group of subsidiaries and how some processes within the preferred structures often lead to conflict between headquarters-subsidiary relationships. The study further suggested strategic management processes that can be recommended for reducing conflict between the two parties.
The research was conducted in one of the largest multinational organizations that own more than 100 subsidiaries in Africa with services ranging from Information Technology Engineering, Consulting, Water Solutions, Industrial Technologies, Project Management, Electrical, Civil, Mechanical, and Process Engineering. Employees from different subsidiaries within this multinational enterprise were given questionnaires to answer based on their experience and their views on the current systems and processes, and further how they think the current systems can be improved to enhance their subsidiary performance.
The literature review provided advantages and disadvantages of the different organizational structures currently in practice between the headquarters and its group of subsidiaries, and new processes that can mitigate conflict between the headquarters and its group of companies were recommended. The background obtained from the literature review assisted in drafting a questionnaire that was sent out to all employees of the multinational enterprise to establish their views on the current organizational rules. Based on the literature review and the results obtained from the questionnaire, in order for multinational enterprises to experience increased organizational returns and enhanced performance, the organizations will have to do adjustments to their existing structures
This research intended to identify advtanges and disadvantages of the organizational structures currently in practice between the multinational headquarters and its subsidiaries, and further recommended processes that could potentially minimize conflict between the two parties.