Firm bosses or helpful neighbours? The ambiguity and co-construction of MNE regional management mandates

Abstract

As multinational enterprises (MNEs) increasingly disaggregate and disperse corporate headquarters (CHQ) activities, the allocation of regional management mandates (RMMs) to local operating subsidiaries is becoming more common. RMMs explicitly break with the traditional assumption of a clear separation between centralised and local decision-making. Yet we know little of how RMMs are enacted by the units involved, or how they evolve over time. Based on a case study of Unilever, we find that RMMs are inherently ambiguous, and identify circumstances under which ambiguity manifests and triggers cycles of sensemaking and sensegiving about the meaning of the mandate. These cycles result in the co-construction of the mandate by multiple units, with changes in RMM scope and governance over time. We also find that sensemaking and sensegiving are most intense among boundary-spanning middle managers. Our work challenges prevailing assumptions that mandates are largely unambiguous when assigned and are unilateral or dyadic accomplishments; demonstrates the importance of sub-unit level analysis in MNEs; and highlights the potential of structuration theory to enrich our understanding of sensemaking and sensegiving in organisations.