Building firm-specific advantages in multinational corporations: the role of subsidiary initiative

Abstract

This paper investigates how subsidiary companies are able to contribute to the firm‐specific advantages of the multinational corporation (MNC). Specifically we examine the determinants of the contributory role of the subsidiary and subsidiary initiative. The study reveals the following significant relationships: (a) internal subsidiary resources in combination with initiative have a strong positive impact on the subsidiary's contributory role; (b) subsidiary initiative is strongly associated with the leadership and entrepreneurial culture in the subsidiary; and (c) contributory role is strongly associated with subsidiary autonomy and a low level of local competition. We discuss the implications of these findings and some of the theoretical issues associated with subsidiary initiative. Our provisional conclusion is that MNC subsidiaries can not only contribute to firm‐specific advantage creation, they can also drive the process. © 1998 John Wiley & Sons, Ltd.

Subsidiary managers’ knowledge mobilizations: Unpacking emergent knowledge flows

“…The solutions created by the subsidiary managers we interviewed often modified existing or developed new routines and technologies, thus initiated changes to the building blocks of organizational MNC competences and capabilities (Dosi, Faillo, & Marengo, 2008;Winter, 2003). This pinpoints towards the decentralization of competence development in the MNC (Birkinshaw, Hood, & Jonsson, 1998;Rugman & Verbeke, 2001;Tippmann et al, 2010). It also suggests an additional consideration about how MNC top management can best be involved in knowledge flows: we argue that it can only influence emergent knowledge flows indirectly, but that developing strategic vision at the subsidiary manager level can be critical to promoting knowledge mobilizations whichwhile perhaps unplanned by top management and emergent -can lead to valuable solutions that contribute to developing bottom up a MNC"s competences.…”

Technological diversity, scientific excellence and the location of inventive activities abroad: the case of nanotechnology

“…Several contributions in the management literature pinpoint to the role of subsidiary development in the expansion of innovation activities abroad (see for example, Birkinshaw et al 1998;Subramaniam and Venkatraman 2001;Rugman and Verbeke 2001;Furu 2001). The argument of these works is that subsidiaries-specific characteristics, such as size, age or managers' leadership behavior, influence the type of innovation activities affiliates can and do perform.…”

O desenvolvimento de competências organizacionais em diferentes modelos gerenciais de subsidiárias de empresas multinacionais Brasileiras

“…As variáveis dependentes do modelo de análise foram a transferência de competências da matriz para as subsidiárias (Frost, Birkinshaw, & Ensign, 2002) com Alpha de Cronbach de 0,812; o desenvolvimento de competências (Birkinshaw, Hood, & Jonsson, 1998) com Alpha de Cronbach de 0,643; e o reconhecimento de competências da subsidiária pela matriz (Li, Barner-Rasmussen, Bjorkman, 2007) com Alpha de Cronbach de 0,883. As competências investigadas foram pesquisa e desenvolvimento, produção, vendas, marketing e recursos humanos.…”