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Article
Publication date: 7 August 2009

Cheng‐An Tsai and Chao‐Tung Wen

The purpose of this paper is to investigate the effects of relational embeddedness on entrepreneurship in Taiwanese subsidiaries in China that are facing an uncertain and…

Abstract

Purpose

The purpose of this paper is to investigate the effects of relational embeddedness on entrepreneurship in Taiwanese subsidiaries in China that are facing an uncertain and emerging environment.

Design/methodology/approach

First, four case studies are conducted to modify theoretical concepts and measuring instruments to fit them into the entrepreneurial context of multinational subsidiaries in a transitional economy. In the second stage, a survey is conducted to examine the associations between relational embeddedness and subsidiary entrepreneurship. A total of 265 executive officers, which is approximately 29 percent of 922 managers in the mailing list, reply to the questionnaire on their subsidiaries.

Findings

This study finds that subsidiary entrepreneurship has an inverse U‐shaped relationship with regards to customer or supplier relational embeddedness, a positive relationship with corporate relational embeddedness and no relationship with government relational embeddedness.

Originality/value

Based on this study of Taiwanese subsidiaries operating in China there is an inverse‐U‐shaped link between relational embeddedness and customers and suppliers. Hence, this study confirms that over‐embeddedness with customers or suppliers negatively influences subsidiary entrepreneurship.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 15 no. 5
Type: Research Article
ISSN: 1355-2554

Keywords

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Book part
Publication date: 20 October 2011

Rob van Tulder, Ana Teresa Tavares-Lehmann and Alain Verbeke

The scholarly attention devoted to entrepreneurship in the international business (IB) literature has been relatively modest. Most of the ‘mainstream’ literature on…

Abstract

The scholarly attention devoted to entrepreneurship in the international business (IB) literature has been relatively modest. Most of the ‘mainstream’ literature on entrepreneurship in management studies (Casson, 1982; Covin & Slevin, 1991; Lumpkin & Dess, 1996; Shane, 2000) has focused on issues such as the determinants of entrepreneurial behaviour and the characteristics of individual entrepreneurs, thereby only occasionally addressing the international context in which entrepreneurial ventures may develop, and the ways in which this international context influences entrepreneurial decision making.

Details

Entrepreneurship in the Global Firm
Type: Book
ISBN: 978-1-78052-115-2

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Book part
Publication date: 20 October 2011

Christine Holmström Lind and Olivia H. Kang

Purpose – The chapter aims at enhancing our understanding on how the headquarters involvement and subsidiary entrepreneurship during the innovation development process of…

Abstract

Purpose – The chapter aims at enhancing our understanding on how the headquarters involvement and subsidiary entrepreneurship during the innovation development process of multinational corporation (MNC) subsidiaries affect the outcome of the innovation in terms of their home market- and organisational performance.

Design/methodology/approach – The study is based on cross-sectional questionnaire survey data from 87 innovation projects in 64 MNC subsidiaries located in Europe, East Asia and the United States.

Findings – Subsidiary entrepreneurship during the innovation process has a positive impact on the subsidiary's market performance and a negative impact on its organisational performance, whereas the involvement of corporate headquarters has a negative impact on the market performance, and a positive impact on the organisational performance.

Research implications – The research provides a starting point for further research on the relationship between the management of innovation processes among MNC subsidiaries and the performance outcomes of such processes.

Practical implications – The study implies that there is a need for corporate managers to take into account the entrepreneurial endeavour of subsidiaries when formulating corporate innovation strategies.

Originality/value: Integrates a top-down and bottom-up perspective on the strategic management of innovation development processes in MNC subsidiaries.

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Article
Publication date: 16 December 2019

Akiebe Humphrey Ahworegba and Ana Colovic

The purpose of this paper is to advance understanding of why subsidiary initiative opportunities face constant opposition, despite being essential to the competitiveness…

Abstract

Purpose

The purpose of this paper is to advance understanding of why subsidiary initiative opportunities face constant opposition, despite being essential to the competitiveness of international organizations. The paper also develops a detailed theoretical framework to showcase the conflicts and opportunities created by subsidiary initiatives, as most research in this field is descriptive and comparative.

Design/methodology/approach

The paper draws substantially on entrepreneurship, agency, contingency and institutional theories, and focuses on the conflict generated by subsidiary initiatives in the context of headquarters–subsidiaries relationships, including the impact of developed and emerging markets. Based on a thorough analysis of the literature, the paper’s conceptual approach aims to develop models of how MNC networks deal with subsidiary initiatives.

Findings

The findings indicate that subsidiary initiative opportunities face opposition from both the organization and its environment.

Originality/value

The paper builds conceptual models showing the network of opportunities and conflicts created by subsidiary initiatives.

Details

Journal of Organizational Change Management, vol. 33 no. 1
Type: Research Article
ISSN: 0953-4814

Keywords

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Book part
Publication date: 20 October 2011

Birgitte Grogaard, Alain Verbeke and M. Amin Zargarzadeh

Purpose – In this chapter, we address the lack of sufficient entrepreneurship in multinational enterprises (MNEs) that seek to improve their ability to achieve national…

Abstract

Purpose – In this chapter, we address the lack of sufficient entrepreneurship in multinational enterprises (MNEs) that seek to improve their ability to achieve national responsiveness. The main reason for this deficiency appears to be the transfer of proven routines from the home country, even when it is clear from the outset that these routines will simply not work and will require much more than a quasi-mechanistic ‘adaptation’ to the new environment.

Methodology/approach – Conceptual

Practical implication – This chapter suggests that MNEs need to close their entrepreneurial deficits in host countries, by allowing novel resource recombinations. These resource recombinations should lead to accessing fully the coveted host country location advantages that triggered entry in these countries and to success in the market place.

Originality/value of the chapter – Most of the contemporary international business literature has studied subsidiary entrepreneurship in the context of established affiliates abroad. Here, we argue that entrepreneurship is equally important in the setting of new foreign market entry. We identify entrepreneurial deficits as the main source of MNEs' failure when trying to achieve national responsiveness.

Details

Entrepreneurship in the Global Firm
Type: Book
ISBN: 978-1-78052-115-2

Keywords

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Article
Publication date: 3 July 2009

Pamela Sharkey Scott and Patrick T. Gibbons

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

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.

Details

Strategy & Leadership, vol. 37 no. 4
Type: Research Article
ISSN: 1087-8572

Keywords

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Article
Publication date: 23 May 2019

Muhammad Mustafa Raziq, Cristina Doritta Rodrigues, Felipe Mendes Borini, Omer Farooq Malik and Abubakr Saeed

Multinational enterprises (MNEs) encourage their subsidiaries to develop and transfer their unique knowledge and expertise back to the MNE as it is critical for the…

Abstract

Purpose

Multinational enterprises (MNEs) encourage their subsidiaries to develop and transfer their unique knowledge and expertise back to the MNE as it is critical for the development of the MNE as a whole. However, what underlies the subsidiary ability to create such specialized knowledge that can be transferred to the MNE is less clear. The purpose of this paper is to examine the influence of MNE entrepreneurial strategy, subsidiary initiatives and expatriation on reverse knowledge transfers in a cross-country comparative context.

Design/methodology/approach

Data are gathered through surveys from 429 foreign subsidiaries operating in New Zealand and 164 subsidiaries in Brazil, and these are analyzed using variance-based structural equation modeling.

Findings

Subsidiary initiatives partially mediate the relationship between MNE entrepreneurial strategy and reverse knowledge transfers in case of subsidiaries operating in Brazil, but they fully mediate in case of New Zealand. Furthermore, expatriation, in case of the latter, has a negative interaction in the relationship between subsidiary initiative and reverse knowledge transfers, but, in case of the former, it has no moderating role. Overall, the results suggest that the influence of MNE entrepreneurial strategy and expatriation on reverse knowledge transfers can be explained by contingencies such as the subsidiary host economy and the heterogenous HQ–subsidiary relationships.

Originality/value

The paper contributes to literature by identifying some contingencies with regard to the occurrence of reverse knowledge transfers. It addresses some research calls with regard to examining reverse knowledge transfers and the role of expatriation across different empirical contexts.

Details

European Journal of Innovation Management, vol. 23 no. 1
Type: Research Article
ISSN: 1460-1060

Keywords

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Book part
Publication date: 14 October 2015

Dorota Piaskowska, Esther Tippmann, Tina C. Ambos and Pamela Sharkey Scott

Today’s MNCs need to adopt smart ways of organizing to tap into the potential of their complex internal and external relationships. This requires MNCs to identify the…

Abstract

Purpose

Today’s MNCs need to adopt smart ways of organizing to tap into the potential of their complex internal and external relationships. This requires MNCs to identify the relevant relationships and to develop appropriate relational skills and capabilities. Hence this chapter addresses two key questions: what kind of relational structures and qualities are conducive to value creation, and how can MNCs best develop and utilize their complex relationships?

Methodology/approach

The chapter reviews the main developments in the area of MNC organizing to date. Subsequently three examples of novel on-going research into MNC relationships are presented. Finally avenues for future research and links to related areas in international business research are discussed.

Findings

The relational perspective on the MNC is well-established. Past research, however, has mostly taken the view of the headquarters-subsidiary dyad without fully conceptualizing the multiplicity of relationships and interdependencies of individuals, groups, and units in the MNC. This chapter uncovers the relational skills required to improve MNC value creation abilities by influencing and leveraging connections among disparate units and individuals to tap their expertise and creative potential. This includes insights into abilities for managing and balancing multiple networks, abilities for mobilizing relevant network actors when driving bottom-up processes, and abilities for facilitating connections and collaboration among different actors.

Originality/value

This chapter advances the understanding and practice of multinational organizing. It presents novel ways to systematically address the complexities and interdependencies of relational effects on the ability of MNCs to create value.

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Article
Publication date: 26 October 2010

Ray Griffin and Thomas O'Toole

This paper seeks to examine the meaning and nature of the structure metaphor in the social sciences, and the consequent implications for the academic activity of…

Abstract

Purpose

This paper seeks to examine the meaning and nature of the structure metaphor in the social sciences, and the consequent implications for the academic activity of describing and substantiating new structural forms of multinational corporations (MNCs) in the international business discourse.

Design/methodology/approach

The paper's approach is primarily conceptual, but also introduces some fieldwork. The paper contrasts generalist work in the social sciences on structure with a close reading of the foundational texts on structure in MNCs along with a broader reading on the considerable attempts to describe new structures for MNCs. By interrelating these literatures with fieldwork that deconstructs stories from actors within MNCs, it opens a broader criticism on the discourse on structuring the MNC.

Findings

The paper suggests that the phalanx of new MNC structures could, perhaps, be better understood as a criticism of using the structure metaphor to describe the MNC. On safer ground, it suggests the point of difference between older forms of MNC and the variously described new forms arise from the contrasting definitions of structure used by Giddens.

Originality/value

The paper's originality and value arise from its unique consideration of the structure metaphor in social sciences and the discourse on structure in the international business discourse. It responds to calls for new research methods, and more critical approaches by those hoping to assist managers, in this functionally‐oriented discourse.

Details

Critical perspectives on international business, vol. 6 no. 4
Type: Research Article
ISSN: 1742-2043

Keywords

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Article
Publication date: 17 August 2012

Chiraz Saidani, Yao Amewokunu and Assion Lawson‐Body

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

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.

Details

Multinational Business Review, vol. 20 no. 3
Type: Research Article
ISSN: 1525-383X

Keywords

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