Breaking Barriers: Navigating Subsidiaries to Overcome Change Resistance in MNC’s

Abstract: The global business environment has become increasingly complex in recent years, resulting in significant challenges for businesses. The ability to handle such complexities has become essential for companies to remain competitive in the market. Organizational change, which involves managing people during organizational change in a complex business environment, has been identified as a critical strategy for achieving this. However, the literature shows that organizational changes often fail, and there is little agreement on the reasons behind this. Therefore, the purpose of this study is to examine the high failure rate of subsidiaries of multinational enterprises that undergo organizational change in a complex business environment, with a focus on the roles of managers and employees in the change process. To explore this complex phenomenon, a qualitative research strategy with an abductive approach was adopted, using hermeneutic research methods to gain a deeper understanding of the empirical data collected from managers and employees. Respondents were selected based on predetermined criteria, resulting in a total of twenty interviews, with eight being managers and twelve being employees. Semi-structured interviews were conducted, allowing for the identification of theoretical themes, and the empirical data collected were discussed and compared to the existing literature using a thematic analysis approach. The findings from the document and literature analysis as well as the empirical finding identified five out of six components that may impact the outcome of organizational change: organizational readiness for change, Change management strategy, Management, support and involvement, Employee engagement and participation, and learning and development. Furthermore, the findings of the thesis highlights that managers can act as a primary barrier during organizational change, as they enable engagement, involvement, and participation among employees towards the change initiatives. Lastly, the study revealed two additional skills that are necessary for managers to possess in order to manage the global complex business environment: analytical thinking and flexibility.