Assigned versus assumed: Towards a contemporary, detailed understanding of subsidiary autonomy

Cavanagh, Andrew; Freeman, Susan; Kalfadellis, Paul; Herbert, Kendall

doi:10.1016/j.ibusrev.2017.04.007

Cited by 22 publications

(37 citation statements)

References 72 publications

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“…Decision‐making autonomy is the freedom; managing directors of foreign‐owned subsidiaries have, to make decisions without having to refer back to their headquarters (Cavanagh, Freeman, Kalfadellis, & Herbert, ; Paterson & Brock, ; Young & Tavares, ). It is seen as a crucial element for understanding subsidiary development and the balance of power within multinational enterprises (MNEs; Birkinshaw & Ridderstråle, ; Li, ; ul Haq, Drogendijk, & Holm, ).…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

“…While autonomy has a long research record, the concept keeps changing along with the very nature of MNEs themselves (Cavanagh et al, ; Dahms, ). With increasing global competitive pressures and recent technological advancements, autonomy in foreign subsidiaries seems even more elusive (Cavanagh et al, ; Kostova, Marano, & Tallman, ). For instance, to remain globally competitive, MNEs have to bundle their resources and competences (or firm‐specific advantages) with resources and competencies embedded in local networks (location‐specific advantages) (Dunning, ; Horn, ; Johanson & Vahlne, ).…”

Section: Introductionmentioning

confidence: 99%

“…While there are a plethora of studies on the topic across various fields of the management literature (Cavanagh et al, ; Paterson & Brock, ; Young & Tavares, ), most fail to address the combined effects of costs in accessing location‐specific advantages and finely slicing value‐chain activities. However, the success of the subsidiary depends to a large extent on its ability not only to gain access to such location‐specific advantages, but also to combine them with firm‐specific advantages (Fenton‐O'Creevy, Gooderham, & Nordhaug, ; Kawai & Strange, ; Rugman, Verbeke, & Yuan, ).…”

Section: Introductionmentioning

confidence: 99%

“…This is because the described associations between asset bundling and fine slicing of value‐adding activities and autonomy point toward causal complexity. So far, that has been completely ignored in previous studies on autonomy as evident in recent literature reviews on the topic (Cavanagh et al, ; Paterson & Brock, ; Young & Tavares, ). For instance, it could be that bundles of competences in certain value‐adding activities lead to autonomy in those areas in combination only with access to certain location‐specific advantages.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Explaining autonomy variations across value‐chain activities in foreign‐owned subsidiaries

Kingkaew

Dahms

2018

Thunderbird Intl Bus Rev

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This article is one of the first to combine the asset bundling model and neo-configurational perspective to explain autonomy variations across different value-chain activities in foreign-owned subsidiaries. We develop tentative answers to three research questions based on survey data of subsidiaries located in Taiwan and Thailand. We use fuzzy set qualitative comparative analysis technique to analyze the data. We found that competence bundles in primary and support activities are key for autonomy development across basic and advanced value-adding activities.Strong relationships with local business networks are more important for autonomy development than links to universities or governmental institutions. The global city location plays a lesser role than expected and the geographic distance is a hindrance to autonomy development in basic as well as advanced value-chain activities. K E Y W O R D Sasset bundling, autonomy, emerging market, foreign-owned subsidiaries, fsQCA, neoconfigurational perspective

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Explaining autonomy variations across value‐chain activities in foreign‐owned subsidiaries

Kingkaew

Dahms

2018

Thunderbird Intl Bus Rev

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Developing successful assumed autonomy‐based initiatives: An attention‐based view

Cavanagh

Kalfadellis

Freeman

2021

Global Strategy Journal

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Research Summary Adopting the attention‐based view of the firm as our principal theoretical lens, we explore the mechanisms by which subsidiaries attract or avoid headquarters attention in developing successful assumed autonomy‐based initiatives. To this end, our study utilizes qualitative data from subsidiary and headquarters perspectives in a multiple case study design. Our study reveals that subsidiaries first engage in non‐disclosure of assumed autonomy‐based initiatives to avoid negative headquarters attention. We then highlight the way in which subsidiaries undertake initiative selling to attract positive headquarters attention; in particular, we identify the unique selling criteria of demonstrable financial success and corporate alignment. Finally, we reveal the importance of timing in balancing the competing dual requirements of non‐disclosure and initiative selling. Managerial Summary Our paper aims to explore the mechanisms by which subsidiaries attract or avoid attention from headquarters, to ensure that their proactive, autonomous actions facilitate the attainment of an extended role within the MNE. We highlight three mechanisms as especially important here for subsidiary managers. First, we reveal that subsidiaries initially engage in “non‐disclosure” of these actions to avoid negative headquarters attention. Second, we discover that subsidiaries ultimately look to demonstrate the financial success and corporate alignment of their autonomous actions. Finally, we emphasize the importance of timing in balancing the requirements of non‐disclosure and the “selling” of the subsidiary's actions to headquarters.

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Subsidiary capability and charter change: Making Birkinshaw and Hood's framework actionable

Dzikowska

Gammelgaard

Andersson

2023

Global Strategy Journal

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Research SummaryWe provide a more granular and comprehensive approach to subsidiary evolution and enhance the understanding of the complexity of the subsidiary's evolution in the era of value chain fine‐slicing. We extend Birkinshaw and Hood's model of general processes of subsidiary evolution into a model of functional evolutionary paths that represents nine configurations of charter and capability changes. We examine initiative, autonomy, and track record as determinants of 1455 functional evolutionary paths identified in 266 subsidiaries operating in the Polish and Swiss manufacturing sectors. Through a two‐level multinomial logistic regression model, we learn that subsidiary initiative and track record are positively related to an increase in subsidiaries' charter and capability enhancement, respectively. Subsidiary autonomy though, is negatively related to charter increase and capability enhancement.Managerial SummaryWe consider subsidiaries' initiative, autonomy, and track record as factors shaping the changes in functional responsibilities and corresponding capabilities. Our results show that frequent and successful initiatives support a functional charter increase but do not necessarily enhance corresponding functional capabilities. Furthermore, a lower level of decision‐making autonomy in efficiency‐driven organizations does not translate into difficulties with a functional charter increase. A subsidiary can benefit from lower autonomy by focusing subsidiary‐development efforts on areas aligned with the headquarters' interests. A proven track record does not translate into a functional charter increase; in some cases, it even increases the likelihood of charter depletion. Nonetheless, it increases the likelihood of enhancing functional capability.

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Assigned versus assumed: Towards a contemporary, detailed understanding of subsidiary autonomy

Cited by 22 publications

References 72 publications

Explaining autonomy variations across value‐chain activities in foreign‐owned subsidiaries

Explaining autonomy variations across value‐chain activities in foreign‐owned subsidiaries

Developing successful assumed autonomy‐based initiatives: An attention‐based view

Subsidiary capability and charter change: Making Birkinshaw and Hood's framework actionable

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