Multinational subsidiary roles in North Africa: managerial initiatives in Tunisia

Abstract

Purpose

This study aims to develop a new reference framework which accounts for the motivations of headquarters (HQs) from developed countries and the roles of their subsidiaries established in developing countries.

Design/methodology/approach

A multiple case studies approach was used for this research. The data were collected using a directed interview with 20 participants in eight foreign subsidiaries established in Tunisia.

Findings

The results show that the studies of subsidiaries can be classified into “workshop” subsidiaries and “market” subsidiaries according to the level of their added‐value activities, the scope of the market served and the level of their decision‐making autonomy. Furthermore, the development trajectory of these subsidiaries takes the form of two consecutive phases. In the first phase, the subsidiaries begin acquiring new competencies which allow them to integrate value‐creating activities that are far beyond intensive labor or low‐technology activities. Subsidiaries in the second phase intervene more and more in strategic decisions related to their growth. While the “workshop subsidiaries” in this study are still in the first phase, the “market subsidiaries” have succeeded in broadening their regional responsibilities within the multinational.

Research limitations/implications

This research had a number of limitations; the most important is the explanatory and qualitative method used in this paper. In addition, this research solely focused on foreign subsidiaries that are still in business. It also would be interesting to investigate the subsidiaries that are stalled or shrank. The perspective of the HQs and the Western institutional players would be also relevant to explore.

Originality/value

Despite the abundance of works on subsidiaries' role, there has been very little research that looks explicitly at the role of foreign subsidiaries in developing countries. This research expands the existing literature and provides evidence on the motivation of multinational companies as well as the role of their subsidiaries in developing countries. This study helps us rethink the redistribution of decision‐making power between the HQs and the subsidiaries established in the developing countries.

Citation

Saidani, C., Amewokunu, Y. and Lawson‐Body, A. (2012), "Multinational subsidiary roles in North Africa: managerial initiatives in Tunisia", Multinational Business Review, Vol. 20 No. 3, pp. 248-265. https://doi.org/10.1108/15253831211261487