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Article
Publication date: 16 October 2018

Marc André Baumgartner and Esther Tippmann

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…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Originality/value

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.

Details

Journal of Business Strategy, vol. 40 no. 3
Type: Research Article
ISSN: 0275-6668

Keywords

Open Access
Article
Publication date: 27 September 2023

Niall O'Riordan, Paul Ryan and Ulf Andersson

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…

Abstract

Purpose

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).

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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

Originality/value

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.

Details

Multinational Business Review, vol. 31 no. 4
Type: Research Article
ISSN: 1525-383X

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: 9 October 2017

Anders Pehrsson

The study draws on the resource-based view and the contingency view of strategy. The purpose of this paper is to contribute to international strategy literature by extending the…

Abstract

Purpose

The study draws on the resource-based view and the contingency view of strategy. The purpose of this paper is to contribute to international strategy literature by extending the current understanding of foreign subsidiary’s competitive strategy in terms of cost leadership and product differentiation.

Design/methodology/approach

Hypotheses concern associations between corporate support building on product and skills relatedness and subsidiary strategies. Also, it is hypothesized that strategies are due to the type of local competitive intensity. The hypotheses were tested on wholly owned subsidiaries of Swedish industrial firms in Germany, the UK and the USA.

Findings

Product and skills relatedness between the subsidiary and the corporate core unit are positively associated with the subsidiary’s emphasis on cost leadership. Also, a positive association was found between skills relatedness and product differentiation, and extensive competitive intensity strengthens the relationship.

Research limitations/implications

The study specifies what business relatedness is needed for a subsidiary’s competitive strategy; skills relatedness is more important than product relatedness; the type of local competitive intensity is important; corporate support and local strategy operate simultaneously.

Practical implications

Management is advised to implement a foreign subsidiary’s competitive strategy by recognizing the mechanisms identified in this study.

Originality/value

In a unique way, the study captures the role of corporate support of a foreign subsidiary’s competitive strategy relying on business relatedness and the importance of aligning the strategy with competitive intensity.

Details

European Business Review, vol. 29 no. 6
Type: Research Article
ISSN: 0955-534X

Keywords

Article
Publication date: 1 February 1993

Joy M. Pahl and Kendall Roth

This study examined the relationship between the headquarters and the foreign subsidiaries of multinational corporations (MNCs). Hypotheses concerning the strategies pursued by…

1599

Abstract

This study examined the relationship between the headquarters and the foreign subsidiaries of multinational corporations (MNCs). Hypotheses concerning the strategies pursued by each MNC, intergroup conflict, conflict management styles, integrating mechanisms, and the effectiveness of the headquarters‐subsidiary relationship are developed and tested. There were no significant differences in the intergroup conflict experienced by subsidiaries pursuing different international strategies. However, effectiveness of the headquarters‐subsidiary relationship was negatively related to intergroup conflict. The use of the avoiding style of conflict management was negatively related to the effectiveness of the headquarters‐subsidiary relationship, as hypothesized. For MNCs pursuing global integration strategies, the use of personal integrating mechanisms and integrating conflict management styles were negatively related to intergroup conflict. For MNCs pursuing local responsiveness strategies, the use of bureaucratic integrating mechanisms and dominating conflict management styles were not negatively related to inter‐group conflict. This ran counter to expectations. MNCs pursuing multi‐focal strategies did not fit neatly into either strategy camp—global integration or local responsiveness.

Details

International Journal of Conflict Management, vol. 4 no. 2
Type: Research Article
ISSN: 1044-4068

Article
Publication date: 10 October 2016

Anders Pehrsson

Drawing on the contingency perspective of strategy, the purpose of this paper is to extend current understanding of fit between a differentiation strategy of the industrial firm’s…

1438

Abstract

Purpose

Drawing on the contingency perspective of strategy, the purpose of this paper is to extend current understanding of fit between a differentiation strategy of the industrial firm’s foreign subsidiary and key contextual boundaries.

Design/methodology/approach

A conceptual framework is developed in which a differentiation strategy involves the complementary approaches of innovativeness and customer responsiveness. The key boundaries consist of local competitive dynamics and the value-adding mandate assigned to the subsidiary. Detailed features of four types of differentiation strategies are identified by analysing strategies applied by subsidiaries of industrial firms operating on the US market.

Findings

Four propositions are developed regarding alignment between strategy types and the boundaries. Relationships are proposed regarding a strategy type and a context specified by rivalry/relational competitive dynamics, and a broad/narrow value-adding mandate.

Research limitations/implications

The conceptual framework and the propositions may be tested by analysing statistical data on industrial firms’ subsidiaries operating in several host countries.

Practical implications

To increase a foreign subsidiary’s contribution to the global competitiveness of an industrial firm, an awareness of the boundaries to the subsidiary’s strategy of differentiation that may hamper the subsidiary’s performance is essential.

Originality/value

The conceptual framework, and the propositions, contributes to literature on the industrial firm’s global strategy because it focuses on subsidiary strategy and extends present understanding of the mechanisms that drive the effectiveness of a foreign subsidiary’s differentiation strategy.

Details

European Business Review, vol. 28 no. 6
Type: Research Article
ISSN: 0955-534X

Keywords

Article
Publication date: 1 April 2003

Georgios I. Zekos

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some…

86938

Abstract

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

Details

Managerial Law, vol. 45 no. 1/2
Type: Research Article
ISSN: 0309-0558

Keywords

Article
Publication date: 24 April 2009

Anders Pehrsson

The purpose of this paper is to extend the knowledge of marketing strategy antecedents of industrial value adding in foreign markets. It attempts to answer the following two…

2435

Abstract

Purpose

The purpose of this paper is to extend the knowledge of marketing strategy antecedents of industrial value adding in foreign markets. It attempts to answer the following two questions: how is the marketing strategy of a foreign subsidiary associated with the extent of its value‐adding activity? Is there an association between the extent of value‐adding activity and financial performance of the subsidiary?

Design/methodology/approach

A model is developed and hypotheses are tested. Data are collected from 191 subsidiaries of Swedish manufacturing firms in Germany, the UK, and the USA.

Findings

Product‐market breadth and market experience positively affect the extent of foreign value adding. Also, market experience has a moderating effect and strengthens the positive association between product‐market breadth and the extent of value adding. A foreign subsidiary's financial performance is positively associated with the number of value‐adding activities of the subsidiary.

Research limitations/implications

The study shows that the marketing strategy of a foreign subsidiary needs to be acknowledged to understand the antecedents of foreign value‐adding activity. In addition, the extent of value‐adding activity contributes to the implementation of an effective international strategy.

Practical implications

An industrial firm wanting to implement an effective international marketing strategy needs to pay attention to the links between the marketing strategy of a foreign subsidiary and the extent of the subsidiary's value‐adding activity.

Originality/value

The study is unique in that it applies a subsidiary perspective and focuses on foreign subsidiary strategy associations. The study both extends the common approach, which argues that the value adding of a foreign subsidiary is determined only by the corporate marketing strategy, and explores associations with foreign subsidiary performance.

Details

International Marketing Review, vol. 26 no. 2
Type: Research Article
ISSN: 0265-1335

Keywords

Article
Publication date: 15 June 2022

Taposh Roy, Jon Burchell and Joanne Cook

While corporate social responsibility (CSR) research and practice has expanded and evolved rapidly in recent years, little is known about how MNC subsidiaries develop their CSR…

Abstract

Purpose

While corporate social responsibility (CSR) research and practice has expanded and evolved rapidly in recent years, little is known about how MNC subsidiaries develop their CSR strategies and how they reconcile global and local demands and pressures from both institutions and stakeholders. The paper aims to understand how institutions and stakeholder pressures interact at both national and international levels and how these interactions shape MNC subsidiaries' CSR in Bangladesh.

Design/methodology/approach

Multiple case studies were used to investigate the CSR practices of 10 MNC subsidiaries operating in Bangladesh. To collect data, twenty-one semi-structured interviews were conducted. For supplementing primary data, secondary data from annual reports and websites were collected.

Findings

The article demonstrates that the practice of CSR in Bangladesh is a result of pressures exerted by parent companies, international institutions and international stakeholders. The article reveals how lack of pressure from local stakeholders and institutions enables subsidiaries to gain traction and use their agency to apply globalised CSR conceptualisations not necessarily applicable to the localised context.

Originality/value

The study has synthesised existing approaches to develop a multilevel framework for understanding how the intricate interactions between institutions and stakeholders from different levels (i.e. national and international levels) determine the trajectory of CSR adopted by subsidiaries in developing countries. This interaction undoubtedly plays a key role in determining the types of CSR strategy being enacted, the potential agency of different actors to shape change and the extent to which such pressures are likely to lead to CSR strategies that actually reflect and respond to the needs of local stakeholders.

Details

Accounting, Auditing & Accountability Journal, vol. 36 no. 2
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 25 February 2019

Sunil Venaik and David F. Midgley

This paper aims to identify the archetypes of marketing mix standardization-adaptation in MNC subsidiaries and to examine the relationships between MNC subsidiary strategy…

2915

Abstract

Purpose

This paper aims to identify the archetypes of marketing mix standardization-adaptation in MNC subsidiaries and to examine the relationships between MNC subsidiary strategy, environment and performance through the theoretical lenses of fit and equifinality.

Design/methodology/approach

The authors use a mail survey to collect data from MNC subsidiary business units located in multiple countries. They apply a novel archetypal analysis method to identify the diverse archetypes of marketing mix standardization-adaptation in MNC subsidiaries. Finally, through cross-tabulation and regression analysis, they examine the relationships between MNC strategy, environment and performance.

Findings

They identify four archetypes of MNC subsidiary standardization-adaptation including a new archetype that is not recognized in the literature. This analysis finds partial support for both fit and equifinality, suggesting complementarity between the two theories.

Research limitations/implications

The study could be extended with longitudinal data to examine the dynamics in MNC marketing mix strategy and performance in response to the changing business environment.

Practical implications

The findings suggest that MNC subsidiary managers could deploy a broader set of international marketing strategy configurations than those currently prescribed to enhance performance.

Originality/value

The authors use a novel configuration-based archetypal analysis method and extend the theoretical typology of international marketing strategies pursued by MNC subsidiaries. The partial support for both fit and equifinality expands the theoretical lens through which we can examine the relationships between MNC marketing strategy, environment and performance.

Details

European Journal of Marketing, vol. 53 no. 2
Type: Research Article
ISSN: 0309-0566

Keywords

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