Pursuing headquarters’ attention: Foreign subsidiaries’ strategic issue selling

Abstract

Foreign subsidiaries seek to gain attention from headquarters, often through strategic issue selling. It is therefore paramount to understand how the packaging of the issue and the process of issue selling affect headquarters’ attention. Cultural distance can influence the effectiveness of issue selling tactics. A study of 342 foreign subsidiaries reveals that when cultural distance is high, emphasizing corporate benefits becomes less effective, possibly due to headquarters' mistrust or misunderstanding. Interestingly, consistency with headquarters' practices matters less in culturally distant cases, offering opportunities for subsidiaries to propose more novel ideas. Joining efforts with other subsidiaries seems to pay off in low cultural distance situations but can backfire when distance is high, as headquarters may fear insurrection. Cultivating social relations with headquarters' executives is crucial for capturing attention, especially in high cultural distance scenarios, as they help bridge trust and compensate for communication gaps. Our sample, obtained from an online survey, contains 342 cases that comprise a broad coverage of 46 different subsidiaries’ countries and 26 different headquarters’ countries.