What are the consequences of initiative-taking in multinational subsidiaries?

By Tina C. Ambos, Ulf R. Andersson, Julian Birkinshaw. 2010

387 citations recorded by the source corpus.

The phenomenon of subsidiary initiative has received increasing attention in recent years, but the consequences of initiatives and the associated dynamics of headquarters–subsidiary relationships have received much less research attention. Building on resource dependence theory and self-determination theory we argue that two basic goals subsidiary managers pursue are to achieve autonomy vis-à-vis corporate headquarters, and influence over other units. We investigate how a subsidiary's past initiatives contribute to its bargaining power, and how headquarters’ response – through granting attention or monitoring – affects the realization of the subsidiary's goals. Using structural equation modeling, our hypotheses are tested by drawing on a sample of 257 subsidiaries located in three different countries (Australia, Canada and the United Kingdom). Our results show that subsidiaries are not able to increase their influence through initiatives unless they get headquarters’ attention. We also find that subsidiary initiatives have a direct effect on subsidiary autonomy, but the caveat is that initiatives also evoke headquarters monitoring, which in turn decreases the subsidiary's autonomy. In addition to providing insights into how subsidiaries can achieve their goals, the paper also sheds light on the critical role headquarters plays in leveraging initiatives, and the influence of individual subsidiaries in the multinational enterprise.

Subfields: Accounting, Management of Technology and Innovation, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/d81df7dd12c40220ee4081b9faf18ba8842feb62

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In Accounting

In Management of Technology and Innovation

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Citations in the corpus

Exploring the paradox of competence‐creating subsidiaries : balancing bandwidth and dispersion in MNEs (2014, background): “It seems clear that the modern MNE acts more as a federation with ‘an on-going power contest’ between the various units (Ambos et al 2010, Najafi-Tavani et al 2013) with the subsidiaries struggling for greater influence (often measured through resource allocation), reflecting an uneasy balancing…”
Internal Embeddedness, Headquarters Involvement, and Innovation Importance in Multinational Enterprises (2011, positive): “From a managerial perspective, being internally embedded is positively related to the subsidiary’s strategic importance and is likely to attract attention from headquarters managers (Ambos et al., 2010; Bouquet and Birkinshaw, 2008).”
The Social and Economic Mission of Social Enterprises: Dimensions, Measurement, Validation, and Relation (2015, background): “Many, if not most, organizations are hybrids composed of multiple identities (Albert & Whetten, 1985).”
The Corporate Headquarters in the Contemporary Corporation: Advancing a Multimarket Firm Perspective (2015, background): “, 2012), local stakeholders (Crilly, 2011), resource dependence, salience to the corporation, managers’ nationalities (Martinez & Ricks, 1989), initiatives and autonomy (Ambos et al., 2010), internal and external embeddedness (Ciabuschi, Dellestrand, et al.”
Knowledge sharing and subsidiary R&D mandate development: A matter of dual embeddedness (2014, background): “The result is an increasing capacity to influence headquarters’ R&D strategic decision-making in favour f the subsidiary’s own interests (Ambos et al., 2010; Andersson et al., 2007).”