Configurations of Strategy and Structure in Subsidiaries of Multinational Corporations

Abstract

A three-fold typology of subsidiary roles (world mandate, specialized contributor, local implementer) was induced from the literature and its empirical validity was confirmed. Adopting a configurational approach, we then explored the ways in which subsidiary 'structural context' varied across subsidiary role types. Structural context characteristics were determined through a discussion of the underlying principles of the 'hierarchy' and 'heterarchy' models of multinational organization. The key findings were: (a) higher strategic autonomy in world mandates than in local implementers; (b) a more internationally configured value-chain in world mandates and specialized contributors than local implementers; (c) lower levels of internal product flows in world mandates than the other two types; and (d) a significantly lower performance in specialized contributors. Implications for a configurational model of subsidiary management, and for heterarchy as a higher level conceptualization, are discussed. Research into the Multinational Corporation (MNC) evolved in two criticaldirections during the mid-eighties. First, a shift in emphasis towards the multinational subsidiary as a unit of analysis created a good understanding of the various strategic roles that subsidiaries take on [Bartlett & Ghoshal 1986; Jarillo & Martinez 1990; Roth & Morrison 1992]. Second, researchers began to explore new conceptualizations of the MNC that challenged many of the assumptions underlying traditional organizational analysis [Hedlund 1986;Ghoshal 1986]. The parallel growth of these two lines of inquiry is testament to their common empirical, and in many cases theoretical, roots. However, what is surprising is the lack of work that specifically addresses the linkages between the two. In essence, the former stream has focused on the meaning of strategy in the MNC subsidiary, while the latter has emphasized structure.

Ownership mode, cultural distance, and the extent of parent firms’ strategic control over subsidiaries in the PRC

“…Note, that including these variables did not change substantive findings, that is, they were in fact Bimpotent^in the present analysis (Becker, 2005). The first was a five-item measure of resource sharing taken from Davis, Desai, and Francis (2000) (α = .74) as research has suggested that high levels of resource sharing between the parent firm and the foreign subsidiary leads to higher extents of control (Andersson & Forsgren, 1996;Birkinshaw & Morrison, 1995). Second, we assessed the level of asset specificity using items developed by (α = .78).…”

“…We challenge this notion under certain conditions. For example, research on Bsubsidiary mandate^clearly indicates that even within the same type of ownership modes, parent firms may have varying levels of control over foreign subsidiaries, depending, for example, on their contribution of firm-specific assets (Birkinshaw et al, 1998) or the type of mandate they develop within the global MNC network (Birkinshaw & Morrison, 1995). These scholars identify determinants of operational control (or autonomy) in foreign subsidiaries and acknowledge that subsidiaries differ in terms of their extent of control; however, they do not take the type of ownership mode into account.…”

¿Regulación internacional del trabajo a partir de los autocompromisos de las empresas transnacionales?

“…Las empresas multinacionales no se pueden comprender como un entramado homogéneo dirigido completamente desde el centro (Birkinshaw, 2000). La planeación, la coordinación y el control se vuelven más difíciles, no solamente a causa de las distancias geográficas; la capacidad de la cúpula empresarial para controlar las relaciones entre la sede central y las sucursales en el extranjero se pone en entredicho gracias a la existencia de amplias zonas de incertidumbre, a las relaciones de poder y de conocimiento y a las rivalidades internas (Kristensen, et al, 2005).…”

“…La planeación, la coordinación y el control se vuelven más difíciles, no solamente a causa de las distancias geográficas; la capacidad de la cúpula empresarial para controlar las relaciones entre la sede central y las sucursales en el extranjero se pone en entredicho gracias a la existencia de amplias zonas de incertidumbre, a las relaciones de poder y de conocimiento y a las rivalidades internas (Kristensen, et al, 2005). También las gerencias locales ganan y aspiran a márgenes de juego para su autonomía frente a las centrales, debido a que las sucursales están incorporadas a tradiciones culturales, sistemas de negocios y mercados diversos, de acuerdo con los contextos institucionales nacionales específicos, que plantean a su turno un diverso tipo de exigencias de acomodación (Birkinshaw, et al, 1995). En los países anfitriones sólo pueden elaborar sus productos y ofrecer sus servicios como organizaciones inmersas en lo local.…”

“…Los lazos territoriales con los países anfitriones son precisamente ¿Regulación internacional del trabajo a partir de los autocompromisos de las empresas transnacionales? ISSN 2011-0324 requisitos de la internacionalización, para poder aprovechar el conocimiento disponible en la región, para acomodarse a los intereses específicos del mercado y de los clientes y para ajustarse a las regulaciones nacionales (Birkinshaw, et al, 1995). Entre mayor sea la importancia del mercado o de los recursos locales y entre más estrecha y comprometedora sea la red de normas y regulaciones legales, tanto más fuerte será la presión por la acomodación a lo local -o también por la autonomía de la gerencia local (Eckardt, et al, 1999;Pries 2002).…”