MNC headquarters’ role in subsidiaries’ value-creating activities: A problem of rationality or radical uncertainty

SummaryWe examine the role of headquarters (HQ) in the value-creating processes of sub-units in the multinational corporation, and claim that this role is dependent on how the knowledge situation of HQ is conceptualized. Two perspectives on the role of HQ are considered: “rationality” and “radical uncertainty”. We find that there are clear differences between the two perspectives concerning the possibility of HQ to shape future innovation projects, monitor these projects and contribute with own expertise. In general the first perspective is rather optimistic about these possibilities, while the second perspective tells us that HQ involvement in the value-creating processes often becomes dysfunctional. The paper ends by indicating how the theoretical conflict between the two perspectives can be addressed by empirical research.