Subsidiary integration as identity construction and institution building: a political sensemaking approach

This paper develops a political sensemaking approach to the post-acquisition integration process, which directs attention to how powerful social actors construct the relationship between multinational corporations (MNCs) and their multiple local contexts. This political, processual and actor-centred perspective explores subsidiary integration as identity construction and institution building. The different characteristics that local and head office managers attribute to the subsidiary establish diverse interests in and political stances towards it and, through actions to resolve these differences, senior decision makers shape the subsidiary’s strategic and structural location in the MNC. We illustrate this argumentation with reference to post-socialist acquisitions by Western multinationals, whose contrasting institutional and management experiences put the problem of multiple contexts and subsidiary integration into sharp relief. This approach complements mainstream international business research by attending directly to the neglected processual nature of subsidiary integration and examining different socio-political dynamics resulting from sensemaking and sensegiving interactions between key actors in the MNC.