Problem perceptions by top managers in distant subsidiaries

Subsidiary managers in distant countries are expected to cope with uncertainty and to bridge the gap between headquarters' strategies and subsidiaries' realities, but few studies make meaningful comparisons between subsidiary managers' perceptions of problems. This is the aim of this longitudinal study. We investigate how expatriate CEOs in Danish subsidiaries in East Asia and in Germany perceive problems compared with native CEOs. Data are mainly gathered in surveys in 1995, 2005 and 2012, in total 205 questionnaires are analysed using structural equation modelling. The results indicate that expatriate CEOs significantly more often report problems of equivocality. Perceived problems in headquarters-subsidiary interactions in East Asian subsidiaries are not significantly associated with CEO expatriate status, but are instead significantly associated with (moderated by) MNC use of cultural modes of control. The study also shows that problem perceptions remain fairly stable over time.