When the goal of a headquarters is to integrate closely with a subsidiary, it becomes essential to understand culturally-defined behaviours and values, in addition to local laws and practices.
How useful are theories of convergence, divergence and crossvergence in explaining the complexities of relationships between headquarters and subsidiaries, and how is this theoretical framework similar to or different from other cross-cultural management frameworks? Which theoretical framework(s) would you apply when considering how to bring about more effective integration with subsidiaries and minimise risk for headquarters?
Importance of Theories of Convergence, Divergence and Crossvergence in Explaining the Relationships between Headquarters and Subsidiaries
Understanding Culturally-defined Behaviours & Values
Integration of headquarters with a subsidiary is not easy as it entails different complexities and it can be managed effectively by understanding culturally-defined behaviours and values (Baumueller, 2007). As well, it can also be handled effectively by understanding local laws and practices. A headquarter may have different beliefs and values whereas a subsidiary it going to integrate have different values and cultures that can be integrated by understanding their defined behaviour and values.
This will present both the entities with a well-organized knowledge of their culturally defined behaviour so that appropriate adjustments or integrations can be made. Local laws and practices will also present both the entities with the information about their working patterns and practices.
Importance of Theories of Convergence, Divergence and Crossvergence
In addition to culturally-defined behaviours & values, the theories of convergence, divergence and crossvergence are also very helpful in explaining and understanding the complexities of relationships between headquarters and subsidiaries. Convergence theory refers that ...