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Article
Publication date: 7 August 2007

Riliang Qu

The paper aims to explore the role of market orientation in the multinational company's subsidiary's business performance.

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Abstract

Purpose

The paper aims to explore the role of market orientation in the multinational company's subsidiary's business performance.

Design/methodology/approach

The paper is based on a questionnaire survey/analysis of a sample of 252 foreign subsidiaries in the UK.

Findings

The paper finds that market orientation is a key driver for business performance at foreign subsidiaries. However, the strength of its impact on performance depends on the subsidiary role.

Originality/value

This is the first systematic investigation of the role of market orientation in multinational companies' subsidiaries.

Details

Management Decision, vol. 45 no. 7
Type: Research Article
ISSN: 0025-1747

Keywords

Book part
Publication date: 15 July 2009

Volker Mahnke, Torben Pedersen and Markus Venzin

This empirical study explores knowledge outflows from MNE subsidiaries and its impact on subsidiary performance. We develop hypotheses derived from literature on MNE knowledge…

Abstract

This empirical study explores knowledge outflows from MNE subsidiaries and its impact on subsidiary performance. We develop hypotheses derived from literature on MNE knowledge flows integrated with an organizational economics perspective on knowledge-creating MNE subsidiaries. The hypotheses are tested using a simultaneous equation model applied to a unique data set encompassing a German MNE, HeidelbergCement. Enablers and impediments of knowledge outflows are assessed to explain why subsidiary managers share their knowledge with other MNE units. Our findings suggest that knowledge outflows increase a subsidiary's performance only up to a certain point and that too much knowledge sharing is detrimental to the contributing subsidiary's performance.

Details

Managing, Subsidiary Dynamics: Headquarters Role, Capability Development, and China Strategy
Type: Book
ISBN: 978-1-84855-667-6

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.

Book part
Publication date: 13 August 2018

Lorenzo Patelli

Purpose – To show the properties of performance measurement and management systems (PMMS) used dialogically and the association between the dialogic use of PMMS and the

Abstract

Purpose – To show the properties of performance measurement and management systems (PMMS) used dialogically and the association between the dialogic use of PMMS and the characteristics of the organizational relationships between parent companies and foreign subsidiaries.

Design/Methodology/Approach – Data were collected through a questionnaire e-mailed to large foreign subsidiaries of multinational firms operating in various industries. Hypotheses regarding factors associated with the extent to which PMMS are used dialogically between parent companies and foreign subsidiaries were tested based on responses to 136 usable questionnaires (45% response rate).

Findings – PMMS are used more dialogically within relationships between parent companies and subsidiaries characterized by subsidiary strategic role and organizational interdependence. Measurement diversity and perceived comprehensiveness of PMMS are higher if PMMS are used more dialogically. Finally, the dialogic use of PMMS is positively associated with subsidiary size and the emphasis on collaboration in the parent company’s national culture.

Originality/Value – In contrast to prior management accounting research that is focused on the outcomes of different styles of use of PMMS, this study shows organizational characteristics and PMMS properties associated with the dialogic use of PMMS. Moreover, this study advances the traditional view of the international business literature that conceives PMMS as bureaucratic systems employed by parent companies to coercively control foreign subsidiaries.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-78756-440-4

Keywords

Article
Publication date: 29 September 2023

Antonios Georgopoulos, Eleftherios Aggelopoulos, Elen Paraskevi Paraschi and Maria Kalogera

In an environment of intensive global mobility, this study aims to investigate the performance role of staffing choices within diverse MNE subsidiary strategies. Incorporating the…

Abstract

Purpose

In an environment of intensive global mobility, this study aims to investigate the performance role of staffing choices within diverse MNE subsidiary strategies. Incorporating the integration-responsiveness (IR) framework with a contingency perspective, this study proposes that the performance success of distinct MNE subsidiary strategies depends on staffing choices. This study argues that performance differences of staffing choices such as assigned expatriates, self-initiated expatriates, former inpatriates and host-country nationals derive from their different knowledge/experience advantages regarding the intra-firm environment and local market conditions.

Design/methodology/approach

The study utilizes a unique sample of 169 foreign subsidiaries located in Greece that faced the outbreak of the COVID-19 pandemic (in 2020). For robustness reasons, this study also captures the imposition of capital controls (in June 2015).

Findings

This study finds important mediating performance effects of a diversified human resource portfolio across distinct subsidiary strategies in difficult times. Integration strategy tends to use more assigned expatriates, locally responsive strategy tends to utilize more host-country nationals, whereas multi-focal strategy favors self-initiated expatriates and former inpatriates, with positive subsidiary performance effects accordingly. So, staffing policies that are suitable to balance the needs of Human Resource Management (HRM) portfolio differ from strategy to strategy. Moreover, this study finds that managing HRM diversity is crucial in turbulent times.

Originality/value

While the empirical evidence has been predominantly accumulated from large economies, largely neglecting performance effects of MNE subsidiary staffing in crisis contexts, the analysis sheds light on a small open economy (i.e. the Greek context) emphasizing rapidly environmental deterioration. The findings extend existing theorizing on international performance and HRM management by providing an integrative conceptual framework linking integration-responsiveness motivated strategies with distinct groups of high-quality human resources under contingency considerations, so creatively synthesizing largely fragmented IB and HRM research streams. The study provides valuable insights into the performance role of non-conventional staffing choices such as self-initiated expatriates and former inpatriates, given that relevant studies examine either exclusively expatriates or compare expatriates with host country nationals, reaching inconclusive results.

Details

Journal of Global Mobility: The Home of Expatriate Management Research, vol. 12 no. 1
Type: Research Article
ISSN: 2049-8799

Keywords

Article
Publication date: 5 June 2023

Antonios Georgopoulos, Eleftherios Aggelopoulos, Elen Paraskevi Paraschi and Maria Kalogera

This paper aims to examine the effect of R&D laboratories on the perceived performance of MNE subsidiaries during recession.

Abstract

Purpose

This paper aims to examine the effect of R&D laboratories on the perceived performance of MNE subsidiaries during recession.

Design/methodology/approach

Employing resource-based view and knowledge-based theory, the authors investigate a unique sample of 171 technologically heterogenous foreign MNE subsidiaries located in Greece over the period of recession 2009–2016. The sample subsidiaries operate different types of R&D laboratories.

Findings

The authors find that MNE subsidiaries with advanced R&D laboratories such as locally integrated laboratories (LILs) and internationally interdependent laboratories (IILs) perform better in recession than subsidiaries with support laboratories (SLs) or subsidiaries without R&D laboratories. Overall, the authors find an asymmetric performance contribution of R&D laboratories at subsidiary level.

Originality/value

The study provides useful insights into the environmentally derived “knowledge-based - performance” context, so filling an important research gap, since little is known about the performance impact of the input-side of technological activity at MNE subsidiary level, especially as regards R&D facilities/infrastructure. Based on the findings the authors identify important managerial implications.

Details

EuroMed Journal of Business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1450-2194

Keywords

Article
Publication date: 9 March 2023

Sven Dahms, Sladjana Cabrilo and Suthikorn Kingkaew

The authors investigate conditions that drive innovation performance in foreign-owned subsidiaries. The authors study five variables affecting innovation performance

Abstract

Purpose

The authors investigate conditions that drive innovation performance in foreign-owned subsidiaries. The authors study five variables affecting innovation performance: organizational agility and digital capabilities as the main drivers and competencies and embeddedness in internal and external networks as complementary antecedents of innovation.

Design/methodology/approach

The authors draw on the neo-configurational perspective and apply fuzzy set qualitative comparative analysis (fsQCA) to empirically test survey data from subsidiaries located in the emerging economies of Thailand and Vietnam.

Findings

While the authors find no single condition on its own determining innovation performance, the authors do find that in concert they form four configurations of high innovation performance. The results indicate that all configurations contain competencies, as well as that subsidiaries should prioritize between internal and external networks to complement agility, digital capabilities, to achieve high innovation performance. The authors also reveal intriguing contextual differences in the innovation performance configurations between the two host countries.

Originality/value

By incorporating causal complexity as well as substitutability and complementarity of innovation drivers, the authors extend the current understanding of subsidiary innovation performance outcomes.

Details

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

Keywords

Article
Publication date: 19 November 2008

Frank McDonald, Svetlana Warhurst and Matthew Allen

This paper investigates whether changes in autonomy and embeddedness in host locations by foreign owned subsidiaries are associated with improvements in performance by subsidiaries

Abstract

This paper investigates whether changes in autonomy and embeddedness in host locations by foreign owned subsidiaries are associated with improvements in performance by subsidiaries. The results provide evidence that increasing operational decision‐making autonomy is associated with enhanced performance as measured by both subjective and more objective measures of performance. The results on the importance of increasing strategic decision‐making autonomy and embeddedness are less clear, with improved performance being detected in some cases, but only for the subjective measure of performance.

Details

Multinational Business Review, vol. 16 no. 3
Type: Research Article
ISSN: 1525-383X

Keywords

Article
Publication date: 31 October 2008

Yu‐Ching Chiao, Chow‐Ming Joseph Yu, Peng‐Yu Li and Yi‐Chuan Chen

This study aims to explore subsidiaries' diversification strategies, both internationally and with regard to their product offerings. The study seeks to examine, at the subsidiary

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Abstract

Purpose

This study aims to explore subsidiaries' diversification strategies, both internationally and with regard to their product offerings. The study seeks to examine, at the subsidiary level, the relationships between subsidiary size, internationalization, production diversification, and performance.

Design/methodology/approach

Based on the archival data of an officially conducted survey, the study used ordered logit regression analysis to test its hypotheses using data from 920 Taiwanese subsidiaries in China.

Findings

The study's results revealed: larger subsidiaries tend to engage in internationalization and product diversification activities to a greater degree, and, as a result, tend to exhibit superior performance; and subsidiaries that pursue outward internationalization and that reinvest in related businesses enjoy enhanced performance.

Research limitations/implications

This study examines Taiwanese firms that have one foreign subsidiary in China. Future research should examine larger firms with numerous foreign subsidiaries in developed countries, and should employ more fine‐grained measurements of subsidiary size to provide a clearer picture of subsidiary‐specific advantages.

Originality/value

Unlike the existing literature, which has tended to take the perspective of the multinational corporation, this study examines internationalization and product diversification at the subsidiary level. By extending the resource‐based view to the subsidiary level, larger subsidiaries might be able to exploit their advantages so as to more successfully implement international and product diversification strategies and improve their performance in a host country.

Details

International Marketing Review, vol. 25 no. 6
Type: Research Article
ISSN: 0265-1335

Keywords

Article
Publication date: 4 January 2016

Stefano Bresciani and Alberto Ferraris

The purpose of this paper is to investigate the relationship between the degree of subsidiary’s external and internal embeddedness and the contribution on subsidiary’s business…

1089

Abstract

Purpose

The purpose of this paper is to investigate the relationship between the degree of subsidiary’s external and internal embeddedness and the contribution on subsidiary’s business performance of a received innovation. In particular it focusses on dual embeddedness of the subsidiary that receives an innovation from the rest of the MNC’s network.

Design/methodology/approach

Using Amadeus databases were selected 93 CEE subsidiaries located in six countries. Data were collected through a standardized questionnaire and three hypothesis were tested through an OLS regression model.

Findings

The results indicate that the two types of embeddedness positively affect the received innovation’s contribution on business performance. Moreover, the inclusion of the interaction term shows how a simultaneously high level of embeddedness in both external and internal business networks lead to a multiplicative and positive effect on subsidiary’s business performance. This means that external and internal embeddedness are not mutually exclusive suggesting, at the same time, the presence of interdependencies between the two networks that leads the “dual embedded” subsidiary to better received innovation performance.

Research limitations/implications

The results are limited due to the sample characteristics and the conceptual focus of network theory. Regarding the first point, the results are derived from MNC coming from developed European countries that are geographically proximate. Regarding the second point, this approach neglects the limitations of networks.

Practical implications

These results, therefore, propose to management the need to force the subsidiary toward a dual embeddedness in order to achieve better performance when an innovation has been received.

Social implications

This study puts in evidence how Eastern European policy makers should increase the knowledge sharing and accumulation in the local clusters between all the stakeholders with the aim at increasing the “appeal” of this area.

Originality/value

The specific contest in which the embedddedness component is analyzed is the main contribution of the paper because most of the previous research have been focussed on subsidiaries that develop and transfer the innovation. Moreover, the specific area where subsidiaries are located (Central and East Europe) may be another important contribution.

Details

Baltic Journal of Management, vol. 11 no. 1
Type: Research Article
ISSN: 1746-5265

Keywords

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