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The authors’ contention in this paper is that the expression of subsidiary strategy in IB literature has become fragmented and incomplete. Therefore, this study aims to propose a rethink on how IB scholarship approaches the important issue of subsidiary strategy by holistically examining the discrete and integrated set of activities, choices and decisions that constitute the subsidiary strategy process for, in this context, assuming a competence-creating role within the multinational enterprise (MNE).

A conceptual model is designed to illustrate the holistic process of subsidiary strategy from assigned to assumed role and how a subsidiary can navigate a pathway to elevated performance and survival.

The paper identifies the key integrated elements that constitute a holistic strategic process that can enhance a subsidiary’s standing within the MNE and maximise its survival prospects.

Particular focus is placed on subsidiaries that strategise to advance their internal corporate role to competence creator via upgraded knowledge capabilities.

This paper offers a roadmap for IB scholars to contribute to a future discourse around the subsidiary strategy process for assuming a competence-creating role.

The purpose of this paper is to contribute to the discussion on how multinational company (MNC) headquarters (HQs) can manage the existing coopetition paradox to ensure innovation within the MNC. In contrast to the rather scarce previous research, the authors argue that HQ needs to solve the coopetition paradox under the sway of a parenting paradox. Hence, HQ faces a dual paradox.

Drawing on the literature on HQ’s role during MNCs’ innovation processes, this conceptual paper revisits the previously suggested HQ measures to enable coopetition among subsidiaries. By applying a sheer ignorance perspective, the authors contribute with a more nuanced understanding of the HQ’s role in innovation activities.

The article identifies four challenges as the HQ faces a parenting paradox that hinders its ability to solve the coopetition paradox: context specificity of subsidiaries’ innovation work, normative expectations of subsidiary managers, potential opportunistic behavior of HQ manager and HQ underestimation of needed resources. The article suggests that HQ needs to become more informed and preferably even embedded in the local innovation networks of its most important subsidiaries and that coopetition should not be managed solely on an HQ level.

Advocating a sheer ignorance perspective, the article pioneers in discussing the role that HQ plays in managing coopetition among subsidiaries in innovation activities.

In this paper, the authors contribute with insights on competition and cooperation in multinational enterprises with a focus on challenges related to these governance mechanisms in a knowledge development context. The mechanisms have been widely recognized as important for developing knowledge, but their contradicting nature implies considerable complexity when it comes to governance. The complexity is further increased as a result of the headquarters-subsidiary relationships. The aim of this paper is to contribute with theoretical and empirical insights on these aspects by focusing on the research question: How and why does competition and cooperation in an MNE emerge over time?

A manufacturing MNE with headquarters (HQ) in Sweden is analyzed on both HQ and subsidiary levels. Interviews with 24 managers in Sweden and India have been performed.

The study illustrates that competition and cooperation are integral aspects in HQ-subsidiary relationships. The results show that both competition and cooperation depend on environmental, organizational and object-related conditions and that these conditions influence the dynamics of the interplay. The importance of including a subsidiary perspective and the interdependencies in an MNE setting are emphasized.

The authors add to the discussion on the interplay between competition and cooperation as they play an important role for knowledge development in MNEs. The results indicate that they do not take place simultaneously, and therefore, the authors suggest that the dynamic can be better understood by focusing on the interplay and analyze the concepts separately.

By the view of attention-building activities as “tools of power,” the authors investigate the impact of subsidiary involvement in attention-building activities on the strategic influence of subsidiaries within multinational corporations (MNCs).

The study is based on survey data from 110 international subsidiaries located in Sweden. Five hypotheses were tested using structural equation modeling with linear structural relations.

The study shows that organizational commitment and external scouting activities, as two attention-building activities, do not directly affect the ability of subsidiaries to gain a strategic influence in MNCs. Rather, the results provide support for the importance of headquarters’ positive attention as a mediator between such activities and subsidiary strategic influence. This implies that subsidiaries do not receive any strategic influence through these activities unless they receive explicit positive attention from the corporate headquarters.

This study contributes to the micro-political view of the MNC by offering insights into the impact of attention-building activities of subsidiaries as a potential source of strategic influence for MNC subsidiaries.

This study aims to find how the turnover of host country nationals (HCNs) would be affected by the knowledge transfer from a headquarter to a subsidiary. Knowledge transfer in a multinational corporation (MNC) has been discussed as a critical factor in the MNC’s success. Because HCNs are essential to synergizing with a new knowledge inflow during this knowledge transfer process, their turnover entails negative consequences such as knowledge loss.

This paper empirically tests the unbalance between knowledge received (KR) and absorptive capacity (AC) as the most critical organizational predictor by using the secondary longitudinal records and survey data of 4,915 employees. Multilevel survival analysis is used to calculate the individuals’ turnover hazard.

While finding that the primary effect of transferred knowledge is to reduce turnover, the study demonstrates the unbalance between a subsidiary’s AC and KR increases the likelihood of HCNs’ turnover within the organization. The authors also recognize the possibility of nonlinear trends of KR and AC on the turnover hazard.

The authors answer how knowledge transfer shapes a subsidiary’s work environment to prevent or increase turnover, which has been barely examined for HCNs who comprise the crucial demographic group in knowledge transfer. To enhance the originality further, this study empirically observes the actual turnover of HCNs with a conceptually comprehensive view incorporating both learning and political approaches.

In the mainstream international business literature on multinational corporations (MNCs), an authoritative central headquarter (HQ) that transfers standardised practices to its subsidiaries remains the norm. This study aims to explore how MNCs coordinate their management practices through principles.

The paper draws on empirical findings from a qualitative in-depth single case study based on evidence-rich qualitative data including observations from how a high-tech MNC headquartered in Sweden coordinates its development practices.

An alternative informal coordination approach (i.e. coordination by principles) is identified. Additionally, antecedents and implications of the approach are presented.

Coordination by Principles may facilitate the internalisation of practices and be a feasible compromise between context adaptation and traditional standardisation, particularly for MNCs with highly heterogeneous research and development operations.

This paper highlights the importance of acknowledging that firm practices often are based on management ideas that HQs adopt to prevent loss of legitimacy. As such, this study contributes to the scarce literature that critically questions the assumption that HQs solely transfer practices to subsidiaries to improve subsidiary efficiency and performance.

The parent-subsidiary nexus has been explored since the mid-1990s, but the extent to which subsidiaries resemble their parents remains unclear. Therefore, this study examines the performance drivers for subsidiary banks in emerging markets and their parents to determine the similarities between these groups. The findings could help identify key financial performance measures that should be included in global strategies for multinational banks operating in emerging markets.

The study uses data on subsidiaries from 32 countries, including 20 European transitioning countries and 49 parent companies operating internationally from 1996 to 2015. It considers several models that distinguish between units using individual bank effects and the stochastic structure. In a robustness analysis, EU- and non-EU-based institutions are distinguished and long-term historical links between parents' and subsidiaries' countries are considered.

Cost control, capital adequacy and asset quality policies have similar importance for parent banks and subsidiaries and are strictly coordinated, whereas the remaining policies allow more flexibility. Subsidiaries in the EU and in countries that were politically and/or militarily influenced by parent countries do not “fall far from the tree”, which signals their strong group-wide integration and coordination.

This study covers a limited number of emerging market countries due to the limited availability of long-term series data. Future studies should include more countries.

This study identifies key financial measures used on a group-wide basis for performance management while accounting for long-term relations between host and home countries and the geopolitical characteristics of host countries.

This study aims to understand the role of drivers, underlying challenges and, consequently, the implications of the reverse knowledge transfer (RKT) process for the multinational enterprises (MNE)s.

A dyadic qualitative research design was used with a cross-country design covering perspectives from both the headquarters and subsidiaries from the USA, Denmark, Pakistan, India and Bangladesh. In-depth interviews were conducted with managers in multiple sectors such as information technology, telecommunications, project management and engineering.

The study reveals the constraints and drivers of the RKT process, and furthermore elaborates on the implications for MNEs. RKT can lead to the development of new processes, subsidiary independence and intra-organizational knowledge transfer. Besides, it can entail challenges such as position insecurity for subsidiaries and a blurring of the MNE market vision. The findings demonstrate several implications for the MNEs.

The study highlights the direct implications of RKT for the multinational enterprises. The findings serve as a practical guide for global managers seeking to improve their competitive edge.

The study presents a framework of the RKT process from emerging market subsidiaries to parent companies, that demonstrates the role of drivers, underlying challenges and implications of the RKT process for the MNEs.

The aim of the paper is to identify the determinants of the marketing and managerial knowledge transfer from a foreign subsidiary located in a post-transition country to its headquarters established in a developed country.

The authors combined the critical literature studies and empirical research, where the method of Computer-assisted Telephone Interview (CATI) was applied. The empirical data was gathered from 231 manufacturing foreign subsidiaries established in Poland (as one of the post-transition economy). To test the hypotheses logistic regression was applied.

The knowledge accumulated in the foreign subsidiary, the amount and level of novelty of innovation in the foreign subsidiary and its strategic autonomy is crucial for the occurrence of the reverse knowledge transfer. However, the more powerful the foreign subsidiary is, the less eager it is to transfer marketing and managerial knowledge to the headquarters.

The study is concentrated just on the manufacturing sector in the Polish economy. The results are based on the opinions and perception of managers, but they represent the corporate perspective (not their individual ones).

The study provokes asking the question about the proper level of strategic autonomy of a foreign subsidiary. The implication related to the autonomy is much about the proper strategy for human resources management. The obtained results indicate that the intensity of innovation in a foreign subsidiary “translates” to the outflow of knowledge from a foreign subsidiary to its headquarters. Thus, encourages headquarters to let their subsidiaries innovate still monitoring their power.

FSs are entities more or less embedded in the host markets, thus their strength and sustainable existence is important for their stakeholders, in particular – internal entities such as employees and external entities such as suppliers, and other cooperating organisations and institutions in the host market. The contribution of FSs to the innovation performance and knowledge pool of external partners is determined much by their absorptive capacity. Thus, the results obtained indirectly point to the importance of external agents ability to absorb and exploit the knowledge.

The originality of the paper concerns three issues. Firstly, the previous studies are mainly focused on either developed or emerging markets and as a result, the peculiarity of post-transition economies, like Poland has been neglected. Secondly, the determinants of reverse knowledge transfer are presented from the corporate perspective. Thirdly, authors focus on marketing and management knowledge distributed from a foreign subsidiary to its headquarter.

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.