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- Edward, Gillmore, et al.
(author)
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How subsidiaries influence innovation in the MNE value chain
- 2018
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In: TRANSNATIONAL CORPORATIONS. - : United Nations Publications. - 1014-9562 .- 2076-099X. ; 25:1, s. 73-100
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Journal article (peer-reviewed)abstract
- As multinational enterprises increasingly disaggregate their value chains and assign functional responsibilities to foreign subsidiaries, they are increasingly focused on augmenting spatially distant activities and resources. At the same time, despite subsidiary managers operating at the “middle” of the organization and having awareness of operational and strategic contexts, they have received significant criticism for hindering the successful coordination and integration of value chain activities. This appears counterintuitive as, on the one hand, MNEs are increasingly disaggregating their value chains and, on the other, subsidiary managers act as frontline managers, at the intersection of their local context and the MNE. We examine the resource stocks of six subsidiaries and the activities of subsidiary managers locally and across global value chains. The results indicate that integration responsibilities are decentralized, as properties of subsidiary mandates, and that the subsidiary managers' connectivity activities significantly affect the strategic influence that they subsidiary can exercise locally and globally. The results also contain important information for policymakers.
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2. |
- Gillmore, Edward, 1983-, et al.
(author)
-
How subsidiaries influence innovation in the MNE value chain
- 2018
-
In: Transnational Corporations Journal. - : United Nations Conference on Trade and Development. - 1014-9562 .- 2076-099X. ; 25:1, s. 73-100
-
Journal article (peer-reviewed)abstract
- As multinational enterprises increasingly disaggregate their value chains and assign functional responsibilities to foreign subsidiaries, they are increasingly focused on augmenting spatially distant activities and resources. At the same time, despite subsidiary managers operating at the “middle” of the organization and having awareness of operational and strategic contexts, they have received significant criticism for hindering the successful coordination and integration of value chain activities. This appears counterintuitive as, on the one hand, MNEs are increasingly disaggregating their value chains and, on the other, subsidiary managers act as frontline managers, at the intersection of their local context and the MNE. We examine the resource stocks of six subsidiaries and the activities of subsidiary managers locally and across global value chains. The results indicate that integration responsibilities are decentralized, as properties of subsidiary mandates, and that the subsidiary managers’ connectivity activities significantly affect the strategic influence that they subsidiary can exercise locally and globally. The results also contain important information for policymakers.
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3. |
- Memar, Noushan
(author)
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What mandate gain can do to a subsidiary?
- 2018
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Conference paper (peer-reviewed)abstract
- Globalization of the multinational enterprises complicated the task of subsidiary’s managers. Since, all of the subsidiary managers activities influence the performance of the unit, in this study by reviewing the MNE middle management framework and acknowledging that all of the activities are important for the survival of the unit we conceptually investigate “What factors cause subsidiary managers to prioritize one activity over others when subsidiary gains a mandate? And does it matter?” To answer these questions, we elaborate on the mandate gain, its prime mover and the spectrum of change in the subsidiary portfolio. We propose a framework of activities by which we distinguish the direction and the amount of the subsidiary managers’ activities post-mandate gain. We finally suggest that when a subsidiary is competing in a hyper-competitive sector where time matters the most, it is best for the MNE to increase the autonomy of subsidiaries in that sector, so the managers can develop subsidiaries portfolio by taking various initiatives in the places they perceive best. Whereas, when MNE has a long-term plan to be located in uncompetitive industry, it is best for the MNE to insert control and coordinate the subsidiaries' portfolio.
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