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How subsidiaries are battling to survive and grow

Pamela Sharkey Scott ((pamela.sharkeyscott@dit.ie) is a Research Fellow at the Faculty of Business, Dublin Institute of Technology. She served more than ten years as a corporate banker in Bank of Ireland)
and
Patrick T. Gibbons ((pat.gibbons@ucd.ie) is the Jefferson Smurfit Professor of Strategic Management at UCD Michael Smurfit Graduate Business School, Dublin)

Strategy & Leadership

ISSN: 1087-8572

Article publication date: 3 July 2009

1120

Abstract

Purpose

This paper aims to enhance the understanding of how subsidiary CEOs can move their unit's activities up the value chain and reduce the risk of subsidiary closure and relocation of its activities.

Design/methodology/approach

The entire population of over 1,100 subsidiaries of multinational corporations (MNCs) located in Ireland were sampled for this study, representing a diversified pool in terms of foreign ownership. Respondents were largely subsidiary CEOs. In addition, 24 subsidiary CEOs/directors from a cross section of eight subsidiaries were interviewed.

Findings

CEOs/directors are taking active steps to enhance their subsidiary's role within the MNC and to move their activities up the value chain. These include positioning to extend subsidiary autonomy, building information networks, creating a climate for entrepreneurship and promoting strategy development processes.

Research limitations/implications

Results from the survey are subject to the standard limitations and a larger pool of interviewees may have strengthened the findings.

Practical implications

Little practical guidance is available to subsidiary CEOs on how they can reduce their subsidiary's relocation risk. This paper addresses this gap and provides a stimulus to CEOs to be proactive in managing their subsidiary's ability to recognize and exploit opportunities to enhance subsidiary contribution and position within their MNC.

Originality/value

While other papers have focused on how subsidiaries can generate initiatives or promote entrepreneurship, the unique contribution of this paper is the identification of strategies CEOs can adopt to enhance their subsidiary's ability to respond to opportunities and position for survival and growth within their MNC.

Keywords

Citation

Sharkey Scott, P. and Gibbons, P.T. (2009), "How subsidiaries are battling to survive and grow", Strategy & Leadership, Vol. 37 No. 4, pp. 43-47. https://doi.org/10.1108/10878570910971638

Publisher

:

Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited

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