The Strategic Management of Multinationals and World Product Mandating

Rugman, Alan M.; Douglas, Sheila

doi:10.2307/3550479

Cited by 17 publications

(11 citation statements)

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“…In particular, improvements in general market structure, infrastructure and education are likely to encourage upgrading of affiliates (Rugman and Douglas 1986, Egelhoff et al 1998, Walsh et al 2002. Birkinshaw and Hood (1998) also emphasise the role of government policy in the form of subsidies and tax concessions.…”

Section: Post-communist Economies 59mentioning

confidence: 97%

“…One of the key factors seems to be the stock of resources accumulated by the affiliate. These include the technological and managerial skills embodied in employees, as well as various organisational assets (Nelson and Winter 1982, Rugman and Douglas 1986, Teece 1989, Rugman and Verbeke 2001, Dörrenbächer and Gammelgaard 2004. While such skills and assets are difficult to observe, they are probably positively related to the age and the size of the affiliate, as well as to any R&D activities it may carry out.…”

Section: Post-communist Economies 59mentioning

confidence: 99%

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Innovative capability in MNC subsidiaries: evidence from four European transition economies

Kokko

Kravtsova

2008

Post-Communist Economies

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This article explores the determinants of innovative capability in a sample of MNC subsidiaries operating in the European transition economies. It finds that innovative capability and autonomy in product and process technology appear to be determined by a different set of variables than capability and autonomy in marketing and management. The most independent affiliates have high innovative capability in product and process technology, but are less prominent in marketing and management technology. Affiliates that are closely integrated with their parent company exhibit the opposite pattern. These differences may have some impact on the kinds of spillovers generated by different kinds of foreign direct investment projects.

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Section: Post-communist Economies 59mentioning

confidence: 97%

Section: Post-communist Economies 59mentioning

confidence: 99%

Innovative capability in MNC subsidiaries: evidence from four European transition economies

Kokko

Kravtsova

2008

Post-Communist Economies

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“…Hedlund (1986) and Bartlett and Ghoshal (1989) argue that subsidiaries may vary in their importance to the MNC as a whole as being capability creators or users. The longestablished Canadian literature on 'world product mandate' subsidiaries (Rugman/ Douglas 1986, Birkinshaw/Morrison 1995 indicates that one important subsidiary role may be the responsibility for a specific capability and the related products on a global basis. Recently, centers of excellence (Frost/Birkinshaw/Ensign 2002) have been examined as capability creators, upon which the rest of the MNC can build.…”

Section: Dimensions Of Subsidiary Typesmentioning

confidence: 99%

An organizing framework for MNC subsidiary typologies

Enright

Subramanian

2007

MANAGE. INT. REV.

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and Key Results■ Existing multinational subsidiary typologies tend to be derived from strategy types, rather than from examining the subsidiaries themselves. However, there seems to be limited convergence of results. We propose a four-dimensional subsidiary framework to understanding the national subsidiary based on the subsidiary's roles in capability creation and capability utilization within the multinational firm as well as the geographic scope and product scope over which the subsidiary has influence. ■ The paper shows that this approach, grounded in the basic strategic choices of market and activity scope at the subsidiary level, allows for an organization and unification of earlier conceptualizations of the national subsidiary in a way that lower dimensionality frameworks cannot. The resulting typology provides a rich set of possibilities for further theoretical and empirical development.

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“…The subsidiary may, for example, have responsibility for production and marketing worldwide but draw on the central R&D labs for new product development. There are many cases of mandates that are limited both geographically and functionally [Etemad and Dulude 1986], and the cutoff point at which a world product mandate becomes rationalizationintegration has been disputed (e.g., Rugman and Douglas [1986]). Furthermore, it is not clear that the world product mandate option is always superior.…”

Section: For At Least the Last Two Decades The Dominant Trend Among mentioning

confidence: 99%

“…Distinctive value-added has long been recognized as necessary for securing long-term investment. The argument for gaining control of product development as well as manufacturing (e.g., Rugman and Douglas [1986]), for example, was based on the need to control a key element of the value-chain. Likewise, the more general phenomenon of manufacturing industry migrating to lower-cost countries has led policymakers in places such as Mexico to push for upgrading of the valueadded in their local operations.…”

Section: Mandate Sustainabilitymentioning

confidence: 99%

How Multinational Subsidiary Mandates are Gained and Lost

1996

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A subsidiary mandate is a business, or element of a business, in which the subsidiary participates and for which it has responsibilities beyond its national market. This research studied thirty-one mandates in six Canadian subsidiaries of U.S.-owned multinational corporations. A life-cycle framework was proposed, and used to explore the factors associated with the gain, development and loss of mandates by subsidiaries. Two key findings emerged. First, it was shown that there is a risk in having a full-scope world product mandate, because it is possible to become marginal to the corporate strategy. Second, it was observed that the engine of subsidiary growth is its distinctive capabilities, and that for a mandate to be effective it must be built on those capabilities. Implications for mandate sustainability are proposed on the basis of these two insights. For at least the last two decades, the dominant trend among large multinational corporations (MNCs) has been towards the integration of their globally dispersed, value-adding activities [Kobrin1991; Pearce 1992; Porter 1986; Prahalad and Doz 1987]. Many foreign subsidiaries were originally set up as "miniature replicas" and branch plants [White and Poynter 1984], undertaking value-added activities as a means of placating the host government and avoiding tariffs. However, the globalization of business, and in particular the increasing liberalization of trade within and between regions, has made such operations increasingly uncompetitive. Many subsidiary operations have been closed; the rest have taken on specialized roles, involving greater market scope (e.g., exporting) but a narrower range of functional and/or product responsibility [Crookell 1986; Pearce 1992].

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The Strategic Management of Multinationals and World Product Mandating

Cited by 17 publications

References 0 publications

Innovative capability in MNC subsidiaries: evidence from four European transition economies

Innovative capability in MNC subsidiaries: evidence from four European transition economies

An organizing framework for MNC subsidiary typologies

How Multinational Subsidiary Mandates are Gained and Lost

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