Internal embeddedness, geographic distance, and global knowledge sourcing by overseas subsidiaries

The structural reshaping of globalization: Implications for strategic sectors, profiting from innovation, and the multinational enterprise

“…Each embeddedness layer is associated with a different set of actors and corresponding knowledge buffering challenges that MNEs must address effectively in order to create and appropriate value (Meyer, Mudambi, & Narula, 2011). MNEs also need to manage different layers of internal embeddedness (Asakawa, Park, Song, & Kim, 2018;Zollo, Bettinazzi, Neumann, & Snoeren, 2016), whereby internalization per se may not guarantee protection from (neo) techno-nationalism, since some employees may ultimately prove more loyal to their nation state than to the firm. In fact, the findings of the study conducted by Liu and colleagues (2010) suggest an important role for human mobility in facilitating the international flows of knowledge and technology from technologically leading countries (i.e., developed nations) to followers (i.e., emerging economies).…”

Sowing the seeds of subsidiary influence: Social navigating and political maneuvering of subsidiary actors

“…Extant research details the various types of subsidiary mandates or "charters" (Bouquet & Birkinshaw, 2008a;Cantwell & Mudambi, 2005;Galunic & Eisenhardt, 1996) and more recently explores how subsidiaries develop or manage the evolution of their mandates (Andersson et al, 2007;Cavanagh, Freeman, Kalfadellis, & Cavusgil, 2017;Dorrenbacher & Gammelgaard, 2016;Mudambi, Pedersen, & Andersson, 2014;Tippmann, Scott, Reilly, & O'Brien, 2018). All of these studies recognize that subsidiaries have to be cognizant of the control and power corporate HQ has over their ability to influence and "upgrade" to a more advanced mandate than initially allocated (Asakawa et al, 2017;Burger, Jindra, Marek, & Rojec, 2017;Delany, 2000;Garcia-Pont et al, 2009).…”

“…They can be developed or divested, depending on internal and external changes (such as responses to changing customer preferences, changes in CEO, or acquisitions) that affect the overall corporate structure (Birkinshaw & Hood, 1998;Bouquet & Birkinshaw, 2008a). Despite these changes, the challenge for the subsidiary is that it is expected to maintain its mandate in accordance with the corporate strategy, as corporate executives hold the overall power (Asakawa et al, 2017;Yamin & Andersson, 2011). As such, a strategic problem for subsidiaries involves the maintenance of an influential relationship with corporate HQ in the context of growing complexity throughout the MNE network, which creates significant variability in their mandates (Conroy & Collings, 2016).…”

“…Microlevel interactions in a networked structure may be important for informing increasingly distanced and rationally bounded corporate executives of the activities the subsidiary actors are involved in (Ciabuschi, Forsgren, & Martin, 2011;Menz, Kunisch, & Collis, 2015). Subsidiaries may need to consistently convince corporate HQ of the legitimacy of their activities, as the more knowledge corporate executives have about these activities, the more likely the subsidiary will be perceived as transparent and trustworthy (Asakawa et al, 2017;Conroy & Collings, 2016). As such, keeping corporate HQ informed is clearly an important part of a subsidiary's strategy, but knowing when to inform, who specifically to inform, and how exactly to do this are key characteristics of any influence the subsidiary wishes to maintain (Geppert & Dorrenbacher, 2014).…”

“…This is a strategic problem for subsidiaries, in that subsidiary actors that are not seeking to consistently develop influence over their corporate HQ during these changes may risk mandate divestment or strategic isolation (Monteiro, Arvidsson, & Birkinshaw, 2008). Despite extant research acknowledging that the position of the subsidiary is largely dependent on the influence it cultivates over corporate HQ (Asakawa, Park, Song, & Kim, 2017;Conroy & Collings, 2016;Garcia-Pont, Canales, & Noboa, 2009;Yamin & Andersson, 2011), our understanding of the specific mechanisms through which key actors in the subsidiary gain and maintain influence over the corporate HQ during mandate change remains limited. As such, greater consideration of subsidiary influence as a continuous activity that is frequently contested over time, rather than incidentally established in defined periods of bargaining or negotiation, is needed (Dorrenbacher & Gammelgaard, 2006;Najafi-Tavani, Giroud, & Andersson, 2014).…”