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Article
Publication date: 6 November 2020

The research was governed by the following questions: 1. What opportunities and conflicts do subsidiary initiatives create in HQ-subsidiary relationships? 2. How does the…

Abstract

Purpose

The research was governed by the following questions: 1. What opportunities and conflicts do subsidiary initiatives create in HQ-subsidiary relationships? 2. How does the MNC subsidiary network stifle or oppose subsidiary initiatives, and what role does HQ play in this process? 3. Does the subsidiary’s operating environment generate obstacles to new initiatives? 4. What factors moderate subsidiary initiative conflict in the MNC network?

Design/methodology/approach

The authors reviewed publications focusing on subsidiary initiatives from four leading databases – JSTOR, EBSCO, Google Scholar and Science Direct. They chose 52 papers for analysis of HQ-subsidiary issues. They chose an additional 62 publications that related to local environmental pressures that hindered subsidiaries. They narrowed their focus to emerging markets such as Nigeria

Findings

For subsidiary initiatives to do well, it’s essential to attract the “attention or interest” of HQ. But HQ pays attention only if it sees how the local plans will contribute to the corporation's overall interests. The corporate immune system (CIS) may become a major obstacle. It usually arises when CIS conflict triggers intra-firm competition over similar products between rival subsidiaries. However, if HQ perceives a subsidiary as having superior strategy it will be supportive of its initiatives.

Originality/value

Previous studies had focused on internal issues at the multinationals, whereas the authors wanted to study also the environmental obstacles to subsidiary initiatives

Details

Human Resource Management International Digest , vol. 29 no. 2
Type: Research Article
ISSN: 0967-0734

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Article
Publication date: 2 September 2021

Sandra Sun-Ah Ponting

This paper aims to use an organizational ethnography perspective to explore how subsidiary hotel properties of a multinational hotel corporation experience planned…

Abstract

Purpose

This paper aims to use an organizational ethnography perspective to explore how subsidiary hotel properties of a multinational hotel corporation experience planned organizational identity (OI) change instituted by headquarters.

Design/methodology/approach

This study uses a multi-site approach to collect ethnographic data on organizational change from six hotel subsidiaries in California, USA. Over three years, multiple sources of data were collected including: 31 interviews with hotel subsidiary leaders; more than 100 participant observation hours including job shadows, conferences and meetings; and photographs and internal communication materials.

Findings

Multinational hospitality companies face struggles between corporate standardization and subsidiary localization. This paper reveals that when headquarters plan changes focused on employees at their subsidiaries, the ways the latter initially accept and resist change are significantly impacted by the organizational memory and history of subsidiary leaders. However, as time progressed, properties with strong financial performance continued to operationalize new identity initiatives while properties with poorer profit margins played a balancing act between headquarters’ visionary identity and subsidiary ownership’s revenue expectations. Additionally, the situational realities caused by the COVID-19 pandemic put a halt to all properties which amplified practical and emotional challenges of organizational ethnography in hospitality research.

Originality/value

This paper contributes to hospitality literature by introducing an under-researched concept, OI change and advances understanding of the struggles in managing multinational company change. More importantly, this paper is a stepping stone for future hospitality management to embark on organizational ethnography.

组织身份改革的响应:从跨国酒店集团的下属公司获得的民族志学的见解

研究目的

本研究运用了组织民族志的视角来探索跨国公司旗下酒店如何经历由总部主导的计划性组织身份改变。

研究设计/方法/途径

本研究通过多点民族志方法收集了美国加州六个附属酒店关于组织变化的数据。在三年中本研究收集了多种渠道的数据, 包括:1) 31份关于酒店领导层的访谈资料; 2)100多个小时对职业见习和会议等的观察数据; 3)图片和内部沟通资料。

研究发现

跨国公司面临来自集团总部标准化和附属子公司本土化的挑战。本研究发现当总部计划对附属公司的员工进行改革的时候, 员工初始的接受或者反对会显著受到组织记忆和附属公司领导层历史的影响。然而, 随时间变化, 财务业绩较强的附属公司会继续奉行新的组织身份计划, 然而财务业绩较差的公司会采取平衡的策略来调节总部期待的愿景身份以及附属公司本身的收益预期。此外, 新冠疫情导致的所有产业停滞的局面也增大了运用组织民族志在酒店管理研究的实践和情绪方面的挑战。

研究原创性/价值

本文通过引入新的概念——组织身份变革, 以及通过推进关于管理跨国公司组织变化挑战的理解对酒店研究领域做出了贡献。更加重要的是, 本研究为今后的酒店管理研究领域的组织民族志学的研究创造了跳板。

Details

Journal of Hospitality and Tourism Technology, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1757-9880

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Article
Publication date: 10 September 2021

Mehdi Rasouli Ghahroudi, Seyed Hossein Chabok and Kieran M. Conroy

This study aims to focus on dual embeddedness as an important channel through which foreign subsidiaries access and share valuable and idiosyncratic knowledge within the…

Abstract

Purpose

This study aims to focus on dual embeddedness as an important channel through which foreign subsidiaries access and share valuable and idiosyncratic knowledge within the multinational corporation (MNC). The authors examine the dual embeddedness challenges of foreign subsidiaries based in the context of Iran as a transitional market.

Design/methodology/approach

The final sample includes 144 active foreign subsidiaries in Iran from across a broad range of industries. A structured questionnaire was distributed to firms and structural equation modeling was adopted to analyze the results.

Findings

The findings reveal how building external embeddedness in an environment with potentially poor access to valuable knowledge, and risk of knowledge leakage impacts the subsidiary’s ability to subsequently transfer this knowledge within the MNC. The authors identify the significance of absorptive capacity as a way for the subsidiary to access knowledge from and share knowledge with firms in the local market.

Originality/value

Departing from existing work on subsidiary embeddedness in developed markets, the authors reveal how competence creating subsidiaries manage dual embeddedness and knowledge transfer in transition economies that are low in knowledge stocks. The authors unpack how subsidiary absorptive capacity enables access to local knowledge in a transitional market and increases reverse knowledge transfer in the MNC. In doing so, the authors answer calls for work on the dynamic and complementary relationships that exists between subsidiary dual embeddedness, absorptive capacity and knowledge sourcing in less open markets. Focusing on Iran as a transitional economy, this study provides greater contextual nuance to the extant literature on subsidiary dual embeddedness.

Details

Multinational Business Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1525-383X

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Article
Publication date: 24 August 2021

Muhammad Shujaat Mubarik, Miao Miao, Muhammad Faraz Mubarak, Syed Imran Zaman, Syed Hasnain Alam Kazmi and Navaz Naghavi

The primary objective of this study is to investigate the impact of a host country's corruption on the autonomy of a foreign subsidiary from a country with lower tolerance…

Abstract

Purpose

The primary objective of this study is to investigate the impact of a host country's corruption on the autonomy of a foreign subsidiary from a country with lower tolerance for corruption. In doing so, the study examines the moderating role of subsidiary-headquarters communication and multinational corporation's (MNC's) prior international experience in countries with a higher tolerance for corruption.

Design/methodology/approach

The data were collected from 182 foreign subsidiaries of 57 Malaysian MNCs operating in 16 host countries. The study employed ordinary least square (OLS) using Stata16.1 to analyze the modeled relationships.

Findings

The findings of this study reveal a significant positive association between the extent of corruption in the host country and the subsidiary's autonomy. The findings illustrate that an MNC's prior experience in the country with an increased tolerance for corruption does not moderate the association between corruption and subsidiary autonomy. However, the findings also confirm that the extent of headquarters-subsidiary communication negatively moderates the association between corruption and subsidiary autonomy.

Originality/value

The study uses unique data collected from Malaysian MNCs. Furthermore, the study contributes to the literature by bringing forth subsidiary autonomy as a counter strategy to potential risks that can arise due to weak institutions and widespread corruption in a host country.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 5 August 2021

Amonrat Thoumrungroje, Olimpia C. Racela and Man Zhang

Grounded in strategic choice and resource-based views, this study aims to investigate the antecedents and consequences of relational strategic emphasis of foreign…

Abstract

Purpose

Grounded in strategic choice and resource-based views, this study aims to investigate the antecedents and consequences of relational strategic emphasis of foreign subsidiaries operating in Thailand. Four types of relational strategies were identified with associated differential performance outcomes.

Design/methodology/approach

Data collected via self-administered surveys from a diverse sample of 168 foreign subsidiaries were analyzed in two stages. First, multinomial logistic regression was used to test whether resource-bridging capability, nonmarket-based assets and market-based assets were significant predictors of relational strategy type. Then, multivariate analysis of variance was used to determine whether the four relational strategy types differed in their strategic performance and financial performance.

Findings

The three resource-based motives are significant predictors of relational strategy. Firms adopting the “dual-relational” strategy tend to have the highest level of resource-bridging capability and nonmarket-based assets while firms pursuing the “business-oriented” strategy are likely to possess a higher level of market-based assets. Extensive reliance on relational ties enables foreign subsidiaries to achieve a much higher level of strategic and financial performance than those that chose to only rely on transactional or contractual relations.

Practical implications

Foreign subsidiaries operating in emerging markets characterized by an unstable market environment have to establish good relationships with buyers, suppliers and distributors, as well as government agents.

Originality/value

Using a juxtaposition of political and business ties, a typology of the relational strategy was conceptualized. This study extends non-market strategy research by investigating the relationship between resource and capability in the choice of relational strategy. Diverse degrees of political and business ties show different impacts on strategic and financial performances.

Details

Journal of Asia Business Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1558-7894

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Article
Publication date: 4 August 2021

Igor Gurkov and Ivan Shchetinin

This paper aims to detail the actions of the Russian subsidiary of a multinational IT company, during the COVID–19 pandemic, aimed toward the exploration and exploitation…

Abstract

Purpose

This paper aims to detail the actions of the Russian subsidiary of a multinational IT company, during the COVID–19 pandemic, aimed toward the exploration and exploitation of unexpected business opportunities. It depicts the strategic and tactical actions of the subsidiary and corporate initiatives during the pandemic, revealing tensions between the subsidiary and its corporate parent on implementation of each’s initiatives.

Design/methodology/approach

A case study is presented, based on action research, using internal documents from the company under consideration, participation in various working meetings, meetings with customers and interviews with subsidiary management.

Findings

The strategic actions implemented by the subsidiary during the pandemic exemplify strategic agility, i.e. a set of activities carried out by a company that create value in a turbulent and unpredictable environment which in turn require systematic variations in specific processes, products and structures. Some of those variations included the unauthorized amendment of internal corporate rules, leading to tensions between the subsidiary and parent company. This case illustrates that such parent-subsidiary tensions are an inevitable element of achieving agility at the subsidiary level, especially during rapid and unpredictable changes in the business environment.

Research limitations/implications

This study presents the flow of events in one multinational corporation subsidiary. However, the authors speculate that similar situations (subsidiary actions exploiting emergent business opportunities and which have been restricted by rigid internal corporate rules and regulations and low receptivity from corporate headquarters) occurred in many multinational corporation subsidiaries, aiming to explore and exploit nascent business opportunities in local markets during the pandemic.

Practical implications

The study confirms the necessity for the review of the functioning of the corporate immune system of large multinational corporations to allow more subsidiary initiatives to flourish than before the pandemic.

Originality/value

The paper presents a case of strategic agility at subsidiary level during the pandemic. It also uncovers the black-boxing managerial decision-making processes in headquarters-subsidiary relations during the extreme turbulence of business environment.

Details

Review of International Business and Strategy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2059-6014

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Article
Publication date: 9 August 2021

Donghong Li, Zhenning Yang, Pengcheng Ma and Hang Chen

The purpose of this paper is to document the relationship between intra-group coopetition and subsidiaries' innovation performance and the moderating impact of the…

Abstract

Purpose

The purpose of this paper is to document the relationship between intra-group coopetition and subsidiaries' innovation performance and the moderating impact of the intensity of external competition.

Design/methodology/approach

Data were collected from 75 subsidiaries in China through a questionnaire survey of their R&D and general managers. The total number of individual respondents was 205. We tested our hypothesis by using ordinary least squares regression.

Findings

Intra-group cooperation was found to promote a subsidiary's performance in product and process innovation. Intra-group competition was found to have a U-shaped relationship with product and process innovation. Intra-group cooperation strengthens the U-shaped relationship between intra-group competition and process innovation.

Research limitations/implications

This study involved firms from more than one industry. Studies of specific industries might reach more specific conclusions. And all of the data were self-reported by the managers of the firms concerned. Future studies would be well-advised to consider more objective data describing pairs of parent firms and subsidiaries.

Practical implications

Subsidiaries ought to build their internal networks to cooperate with each other. That can bring significant advantages in terms of information and synergy in innovation. Subsidiaries are also suggested to take full advantage of the opportunities that intra-group competition brings.

Originality/value

This study is the first one to explore coopetition phenomenon in the context of business group. By taking Chinese business group subsidiaries as the research samples, this research not only extends the coopetition research but also reveals that cooperation and competition are co-existed and exert influence in subsidiaries.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 19 August 2021

Ursula Mense-Petermann

This paper adds to the literature on outward Foreign Direct Investments by Chinese Multinational Corporations (MNCs) in advanced economies. Its objective is threefold: to…

Abstract

Purpose

This paper adds to the literature on outward Foreign Direct Investments by Chinese Multinational Corporations (MNCs) in advanced economies. Its objective is threefold: to characterize the subsidiary roles that advanced economy targets of Chinese Multinational Corporations (CMNC) takeovers typically adopt, to assess the position that these subsidiary roles grant them within the CMNCs as a whole and to flesh out how subsidiary actors perceive and make sense of the particular constellation as a subsidiary of a CMNC. Furthermore, this paper aims to contribute to theory development on headquarters‐subsidiary relations by suggesting an additional theoretical lens.

Design/methodology/approach

The paper draws on in-depth qualitative case studies from the automotive, mechanical engineering and solar industries and focuses on German firms that have been acquired by Chinese MNCs. Theoretically, the present paper draws on extant post-merger integration (PMI) and subsidiary role research, particularly from a micro-political and sensemaking perspective, refined by adding a neo-imperial dominance – lens.

Findings

The paper reveals the subsidiary roles that German subsidiaries of Chinese MNCs typically adopt and discovers the PMI pattern of “reverse integration” delineating quite a particular form of reverse knowledge transfer. Regarding human integration, it emphasizes the importance of neo-imperial attitudes surfacing in the German subsidiaries.

Originality/value

The value of the paper is in contributing to fill the pending research gap on the subsidiary roles that advanced economy subsidiaries of Chinese MNCs adopt, on the resulting positions of these subsidiaries within the overall Chinese groups and the sense that subsidiary actors make of being acquired by a Chinese MNC. The paper also reveals the importance of neo-imperial dominance patterns and attitudes in PMI in the constellation scrutinized.

Details

critical perspectives on international business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1742-2043

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Article
Publication date: 1 June 2000

Sally Bowman, James Duncan and Charlie Weir

The increasing globalisation of markets has generated new debates about the decision‐making role of MNC subsidiaries. Globalisation may be expected to result in greater…

Abstract

The increasing globalisation of markets has generated new debates about the decision‐making role of MNC subsidiaries. Globalisation may be expected to result in greater centralisation of the decision‐making process. This study analyses the extent to which subsidiaries are being given control over a range of decisions. A sample of MNC subsidiaries operating in Scotland was sent questionnaires which dealt with financial, production, employment and research and development decision making. It was found that considerable authority was devolved to subsidiaries in terms of operational decisions. However, strategic decision making remained very much under the control of the parent. This indicates that the control systems being imposed on subsidiaries are selective and that the benefits created for local economies may be not be as great as it initially appears.

Details

European Business Review, vol. 12 no. 3
Type: Research Article
ISSN: 0955-534X

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Article
Publication date: 28 February 2006

Ming‐Ten Tsai, Ming‐Chu Yu and Kuo‐Wei Lee

The primary goal of this study is to examine the relationships among Taiwan’s overseas subsidiaries based on their strategic roles, organizational configurations and…

Abstract

The primary goal of this study is to examine the relationships among Taiwan’s overseas subsidiaries based on their strategic roles, organizational configurations and business performance. However, their relationships also depend on the subsidiaries’ cultural differences between parent company and its subsidiary. Using regression analysis, we show that different types of industries, stages of internationalization, degrees of integration, degrees of localization, and degrees of resource dependence are the most important factors on the subsidiaries’ perceived activity satisfaction. The results indicate that the sample of Taiwanese MNC affiliates falls into three subgroups depending on their global strategies. Active Subsidiaries are highly integrated and have high local responsiveness, Autonomous Subsidiaries have high local responsiveness but low integration,while Respective Subsidiaries have low local responsiveness, but are highly integrated.

Details

International Journal of Commerce and Management, vol. 16 no. 1
Type: Research Article
ISSN: 1056-9219

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