Building firm‐specific advantages in multinational corporations: the role of subsidiary initiative

Building firm‐specific advantages in multinational corporations: the role of subsidiary initiative This paper investigates how subsidiary companies are able to contribute to the firm‐specific advantages of the multinational corporation (MNC). Specifically we examine the determinants of the contributory role of the subsidiary and subsidiary initiative. The study reveals the following significant relationships: (a) internal subsidiary resources in combination with initiative have a strong positive impact on the subsidiary's contributory role; (b) subsidiary initiative is strongly associated with the leadership and entrepreneurial culture in the subsidiary; and (c) contributory role is strongly associated with subsidiary autonomy and a low level of local competition. We discuss the implications of these findings and some of the theoretical issues associated with subsidiary initiative. Our provisional conclusion is that MNC subsidiaries can not only contribute to firm‐specific advantage creation, they can also drive the process. © 1998 John Wiley & Sons, Ltd. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Strategic Management Journal Wiley

Building firm‐specific advantages in multinational corporations: the role of subsidiary initiative

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Publisher
Wiley
Copyright
Copyright © 1998 John Wiley & Sons, Ltd.
ISSN
0143-2095
eISSN
1097-0266
DOI
10.1002/(SICI)1097-0266(199803)19:3<221::AID-SMJ948>3.0.CO;2-P
Publisher site
See Article on Publisher Site

Abstract

This paper investigates how subsidiary companies are able to contribute to the firm‐specific advantages of the multinational corporation (MNC). Specifically we examine the determinants of the contributory role of the subsidiary and subsidiary initiative. The study reveals the following significant relationships: (a) internal subsidiary resources in combination with initiative have a strong positive impact on the subsidiary's contributory role; (b) subsidiary initiative is strongly associated with the leadership and entrepreneurial culture in the subsidiary; and (c) contributory role is strongly associated with subsidiary autonomy and a low level of local competition. We discuss the implications of these findings and some of the theoretical issues associated with subsidiary initiative. Our provisional conclusion is that MNC subsidiaries can not only contribute to firm‐specific advantage creation, they can also drive the process. © 1998 John Wiley & Sons, Ltd.

Journal

Strategic Management JournalWiley

Published: Mar 1, 1998

References

  • Structural and competitive determinants of a global integration strategy
    Birkinshaw, Birkinshaw; Morrison, Morrison; Hulland, Hulland
  • The link between resources and type of diversification: Theory and evidence
    Chatterjee, Chatterjee; Wernerfelt, Wernerfelt
  • Linking organizational context and managerial action: The dimensions of quality of management
    Ghoshal, Ghoshal; Bartlett, Bartlett
  • Internal differentiation within multinational corporations
    Ghoshal, Ghoshal; Nohria, Nohria
  • Different roles for subsidiaries: The case of multinational corporations
    Jarillo, Jarillo; Martinez, Martinez

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