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Strategizing in a multinational corporation requires balancing global and local strategy. The purpose of this paper is to provide some insights into how multinational corporations succeed in this endeavor.

The authors conducted a detailed qualitative investigation of the strategy-development processes at Gamma – a European multinational corporation in the materials industry. Specifically, the authors investigated strategy development in the DACH region (i.e., for the German, Austrian and Swiss subsidiaries). To collect data, they conducted interviews with key informants at the corporate headquarters and the subsidiaries and collected archival data.

The data revealed that Gamma had found an approach to strategy development that balanced its global strategy with local conditions, finding a suitable way to align its global and local strategies. The authors therefore unravel three key insights revolving around subsidiaries’ unique interpretations of the basic idea of global strategy, idiosyncratic strategy development processes in subsidiaries and globally and locally synchronized temporal structures.

Knowing how to balance the strategic needs of headquarters and subsidiaries allows multinational corporations to follow a general strategy while simultaneously developing a local market strategy responsive to the individual market requirements.

This chapter contends that the international business (IB) and strategic management (SM) fields have many commonalities that should be considered in a turbulent globalized business context. IB studies refer to the need for local integration and local adaptation whereas empirics in SM pinpoint the complementary effects of central planning and decentralized decision-making. We present and synthesize these rather field specific perspectives and try to synthesize insights from both fields in an adaptive strategy-making model including the effects of autonomous subsidiary initiatives and intended mandates from corporate headquarters. The model considers local subsidiary actions of both operational and strategic nature and we argue that it may be futile to distinguish between these effects as incremental operational responses can cumulate into more substantial changes over time with dimensions of strategic adaptation. The model provides a foundation for further considerations about how to combine central intent and direction with decentralization and autonomous initiatives in the multinational corporation.

We investigate the extent to which headquarters’ perceived knowledge about overseas R&D subsidiaries influences the level of control over them. We confirm that headquarters’ knowledge about its overseas R&D subsidiaries lowers the level of control over them. Surprisingly, however, granting legitimacy to R&D subsidiaries does not necessarily lead to a reduction in headquarters’ control. In addition, R&D subsidiaries’ legitimacy does not influence the effect of headquarters’ knowledge about them on the level of control. Although headquarters’ knowledge about R&D subsidiaries tends to grant them legitimacy, the effect of that legitimacy seems rather minimal. These findings imply that headquarters are reassured when it reduces its control over the subsidiaries based on updated knowledge about their current situations rather than on an already-established positive image of those subsidiaries.

Studies of corporate social responsibility (CSR) and stakeholder engagement have recently gained traction in the global strategy field. However, they have mostly developed as parallel streams, thereby limiting the cross-fertilization between global strategy research and stakeholder theory. We believe that because the CSR context in essence calls for the simultaneous participation of a large and heterogeneous set of local and global stakeholders, it requires a novel theorizing of multinational enterprises’ (MNEs’) worldwide practice implementation. Thus, we develop a series of propositions in the context of CSR to highlight the role stakeholders play in MNE subsidiaries’ implementation of initiatives, depending on the complex institutional pressures that they undergo, their distance from the parent’s home country, and their level of network embeddedness. We focus in particular on the role of stakeholder demands alignment in subsidiaries’ CSR implementation. Our conceptual propositions are enriched by the consideration of illustrative data on initiatives undertaken by Iberdrola from 2008 to 2014.

Purpose – This study explores subsidiaries' local network embeddedness and how it contributes to localised subsidiary innovation output from a social network perspective. In particular, we are interested in analysing the consequences of local network density, diversity and, subsidiaries' network position on its innovation outcomes.

Design/methodology/approach – Data are derived from a longitudinal quantitative study of the entire R&D network within one of the largest life science cluster in Germany, the ‘BioRegion Rhein-Neckar-Dreieck’.

Findings – Our findings indicate that the size (density) of the local network has an inverted U-shaped effect on the innovation outcomes of MNC subsidiaries. Our findings further indicate that a strong brokerage position in the local network has a significant positive influence on the innovation output while a position in the core of the network has a significant negative effect on the innovation output.

Research implications – Our results shed new light on the relationship between local embeddedness, brokerage, the danger of overembeddedness and innovation output of MNC subsidiaries.

This chapter provides an empirical investigation into the process by which subsidiaries in multinational firms add capabilities in a given line of business. We describe the process of subsidiary capability development as a non-recursive relationship between the parent's transfer of decision-making power and capability development, which then affects subsidiary performance. The empirical results from survey data confirm such mutually reinforcing mechanisms and highlight the importance of both external and internal forces that facilitate or impede the developmental process.

The purpose of this paper is to explore the scope for action of local human resource managers, who are employed in foreign subsidiaries of multinational companies (MNCs), for implementing training activities. These managers are situated in relationships to headquarters and the local environment. Related to this is the question whether MNCs contribute to the local skill base by implementing training activities or whether they exploit the existing skill formation system.

This study focusses on German subsidiaries of MNCs with headquarters in the USA and the UK, France, China and Japan. The study is based on 107 expert interviews with subsidiary managers and representatives of local stakeholder organisations, such as educational organisations, chambers, economic promotion agencies and governmental bodies in Germany.

The study reveals that headquarters introduce general schemes for training. In addition to these MNC-internal trainings, local managers use their information advantage over headquarters to implement dual training activities.

The training activities of subsidiaries are dependent on the institutional settings of the host country.

Albeit dual training activities are laborious and tie the local managers down for the medium and long term, the future need of the subsidiary for adequately skilled workforce prompts local managers’ engagement in implementing dual training activities.

Subsidiaries contribute to the local skill base and do not act in a free-rider position, at least in the German variety of capitalism.

The study deepens insights on distanced relations within and how subsidiaries generate scope for action by using this kind of relationships.

The article aims to explain how the drivers of subsidiary evolution influence a multinational company's (MNC) research and development (R&D) subsidiary's evolution over time.

The article draws on insights from a longitudinal comparative case study of three Swedish MNCs' Indian R&D units.

The study shows that the evolution of R&D units is a triangular showdown among headquarter assignments, local market constraints, and opportunities, and that subsidiary choice is an important driver of both mandated extension and stagnation. We summarize our findings in various propositions that emphasize different drivers over time and that highlight the strong impact of a subsidiary's understanding of the corporate immune system on the evolution of that subsidiary's R&D mandate.

Drawing on the common limitations of a case study approach, further research is needed to test the suggested propositions with larger samples, ideally with subsidiaries in other emerging and developed markets.

The study illustrates the risks involved for subsidiary managers when pushing an R&D mandate-related initiative too far and provoking the corporate immune system. For headquarters management, the study highlights the importance of understanding that the development of R&D competence and capability at a subsidiary cannot be guided solely by headquarter assignments and local market characteristics; rather, the subsidiary's initiatives also need to be considered.

The study contributes to the literature on R&D internationalization by showing how the drivers of subsidiary evolution influence a subsidiary's R&D mandates over time and that subsidiary choice is an important driver of both mandated extension and stagnation.

The purpose of this paper is to empirically analyze what effects the headquarters’ (HQ) business strategy and corporate culture, the local network embeddedness of the foreign subsidiary, and HQ-subsidiary communication have on the staff localization of foreign subsidiaries. The authors carry out empirical analysis on how localization of foreign subsidiaries ultimately affects the performance of foreign subsidiaries.

This study is an empirical analysis on the determinants of staff localization and the relationship between staff localization and corporate performance. In this study, the five hypotheses were proposed and tested using survey data. The authors randomly selected a total of 800 companies as subjects and conducted a survey. The final 222 survey data including HQs and subsidiaries were used for empirical analysis. The statistical analyses such as reliability test, factor analysis and regression were used.

This study shows that there was a higher level of staff localization by the foreign subsidiary when the investment goal was market-oriented investment, the Korean foreign subsidiary had stronger local network embeddedness and there was better HQ-subsidiary communication. In addition, the relationship between localization and subsidiary performance shows an inverted U-shape. Such results will give various implications to companies.

The research that takes a multilayered consideration on factors of the HQ, subsidiaries, and the HQ-subsidiary relationship is rare. To overcome such limitations, this study carried out a survey in order to find more in-depth decision factors. Specifically, this study analyzed the effects of three large aspects of investment goals and corporate culture from the aspect of the HQ, local network embeddedness from the aspect of foreign subsidiaries, and the level of HQ-subsidiary communication from the aspect of HQ-subsidiary relations, and how they affect staff localization.

The purpose of the study is to determine the local antecedents of subsidiary participation in global services and, subsequently, the impact on local performance.

The study is based on a survey with the local subsidiaries of 14 manufacturers engaged in global services as part of their servitisation strategy.

Findings show support for considering the local ability for global services as an antecedent for local subsidiary participation in global services and the local service performance as an outcome. In addition, the results reject our hypotheses related to the specific roles of local opportunity and motivation for global services.

This study provides novel insights on the global service operations of manufacturers by highlighting the perspective of subsidiaries engaged in the local service delivery and development of global services. This perspective sets the conditions of the global-local collaboration in the context of global service strategy with local service delivery.