IDEAS home Printed from https://ideas.repec.org/a/bla/jomstd/v46y2009i2p182-214.html
   My bibliography  Save this article

Subsidiary Strategy: The Embeddedness Component

Author

Listed:
  • Carlos Garcia‐Pont
  • J. Ignacio Canales
  • Fabrizio Noboa

Abstract

This article develops the concept of internal subsidiary embeddedness as the canvas within which subsidiary strategy takes place. Developing an inductive model, we identify three hierarchical levels of embeddedness. The first level is operational embeddedness, which relates to interlocking day‐to‐day relations. The second level is capability embeddedness, which concerns the development of competitive capabilities for the multinational as a whole. The third level is strategic embeddedness, which concerns a subsidiary's participation in a multinational corporation's strategy setting. We derived our concept of embeddedness from an in‐depth case study. Embeddedness is not merely an outcome of the institutional setting in which a subsidiary is situated, but is a resource a subsidiary can manage by means of manipulating dependencies or exerting influence over the allocation of critical resources. A subsidiary can modify its embeddedness to change its strategic restraints. Therefore, the development of subsidiary embeddedness becomes an integral part of subsidiary strategy.

Suggested Citation

  • Carlos Garcia‐Pont & J. Ignacio Canales & Fabrizio Noboa, 2009. "Subsidiary Strategy: The Embeddedness Component," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 182-214, March.
    • Handle: RePEc:bla:jomstd:v:46:y:2009:i:2:p:182-214
    DOI: 10.1111/j.1467-6486.2008.00797.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-6486.2008.00797.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-6486.2008.00797.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Klaus E. Meyer, 2006. "Globalfocusing: From Domestic Conglomerates to Global Specialists," Journal of Management Studies, Wiley Blackwell, vol. 43(5), pages 1109-1144, July.
    2. Tim Rowley & Dean Behrens & David Krackhardt, 2000. "Redundant governance structures: an analysis of structural and relational embeddedness in the steel and semiconductor industries," Strategic Management Journal, Wiley Blackwell, vol. 21(3), pages 369-386, March.
    3. Julian Birkinshaw, 1996. "How Multinational Subsidiary Mandates are Gained and Lost," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(3), pages 467-495, September.
    4. Andersson, Ulf & Forsgren, Mats, 1996. "Subsidiary embeddedness and control in the multinational corporation," International Business Review, Elsevier, vol. 5(5), pages 487-508, October.
    5. Birkinshaw, Julian & Hood, Neil & Young, Stephen, 2005. "Subsidiary entrepreneurship, internal and external competitive forces, and subsidiary performance," International Business Review, Elsevier, vol. 14(2), pages 227-248, April.
    6. Subramaniam, Mohan & Watson, Sharon, 2006. "How interdependence affects subsidiary performance," Journal of Business Research, Elsevier, vol. 59(8), pages 916-924, August.
    7. L. Felipe Monteiro & Niklas Arvidsson & Julian Birkinshaw, 2008. "Knowledge Flows Within Multinational Corporations: Explaining Subsidiary Isolation and Its Performance Implications," Organization Science, INFORMS, vol. 19(1), pages 90-107, February.
    8. Andersson, Ulf & Björkman, Ingmar & Forsgren, Mats, 2005. "Managing subsidiary knowledge creation: The effect of control mechanisms on subsidiary local embeddedness," International Business Review, Elsevier, vol. 14(5), pages 521-538, October.
    9. John Hulland, 1999. "Use of partial least squares (PLS) in strategic management research: a review of four recent studies," Strategic Management Journal, Wiley Blackwell, vol. 20(2), pages 195-204, February.
    10. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    11. Julian Birkinshaw & Neil Hood, 2000. "Characteristics of Foreign Subsidiaries in Industry Clusters," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(1), pages 141-154, March.
    12. Stephen Hill, 2000. "Decentralization, Integration and the Post-Bureaucratic Organization: The Case of R&d," Journal of Management Studies, Wiley Blackwell, vol. 37(4), pages 563-586, June.
    13. Mike Geppert & Karen Williams & Dirk Matten, 2003. "The Social Construction of Contextual Rationalities in MNCs: An Anglo‐German Comparison of Subsidiary Choice," Journal of Management Studies, Wiley Blackwell, vol. 40(3), pages 617-641, May.
    14. Mats Forsgren & Ulf Holm & Jan Johanson, 2005. "Managing the Embedded Multinational," Books, Edward Elgar Publishing, number 4000.
    15. Tony Edwards & Phil Almond & Ian Clark & Trevor Colling & Anthony Ferner, 2005. "Reverse Diffusion in US Multinationals: Barriers from the American Business System," Journal of Management Studies, Wiley Blackwell, vol. 42(6), pages 1261-1286, September.
    16. Klaus E. Meyer & Enese Lieb‐Dóczy, 2003. "Post‐Acquisition Restructuring as Evolutionary Process," Journal of Management Studies, Wiley Blackwell, vol. 40(2), pages 459-482, March.
    17. Ulf Andersson & Mats Forsgren & Ulf Holm, 2007. "Balancing subsidiary influence in the federative MNC: a business network view," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(5), pages 802-818, September.
    18. Julian M Birkinshaw & Allen J Morrison, 1995. "Configurations of Strategy and Structure in Subsidiaries of Multinational Structure," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(4), pages 729-753, December.
    19. Volker Mahnke & Markus Venzin & Shaker A. Zahra, 2007. "Governing Entrepreneurial Opportunity Recognition in MNEs: Aligning Interests and Cognition Under Uncertainty," Journal of Management Studies, Wiley Blackwell, vol. 44(7), pages 1278-1298, November.
    20. Birkinshaw, Julian & Holm, Ulf & Thilenius, Peter & Arvidsson, Niklas, 2000. "Consequences of perception gaps in the headquarters-subsidiary relationship," International Business Review, Elsevier, vol. 9(3), pages 321-344, June.
    21. Taggart, James & Hood, Neil, 1999. "Determinants of autonomy in multinational corporation subsidiaries," European Management Journal, Elsevier, vol. 17(2), pages 226-236, April.
    22. Ram Mudambi & Pietro Navarra, 2004. "Is knowledge power? Knowledge flows, subsidiary power and rent-seeking within MNCs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(5), pages 385-406, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gammelgaard, Jens & McDonald, Frank & Stephan, Andreas & Tüselmann, Heinz & Dörrenbächer, Christoph, 2012. "The impact of increases in subsidiary autonomy and network relationships on performance," International Business Review, Elsevier, vol. 21(6), pages 1158-1172.
    2. Xiaoying Li & Xiaming Liu & Howard Thomas, 2013. "Market Orientation, Embeddedness and the Autonomy and Performance of Multinational Subsidiaries in an Emerging Economy," Management International Review, Springer, vol. 53(6), pages 869-897, December.
    3. Dellestrand, Henrik, 2011. "Subsidiary embeddedness as a determinant of divisional headquarters involvement in innovation transfer processes," Journal of International Management, Elsevier, vol. 17(3), pages 229-242, September.
    4. Beugelsdijk, Sjoerd & Jindra, Björn, 2018. "Product innovation and decision-making autonomy in subsidiaries of multinational companies," Journal of World Business, Elsevier, vol. 53(4), pages 529-539.
    5. Achcaoucaou, Fariza & Miravitlles, Paloma & León-Darder, Fidel, 2014. "Knowledge sharing and subsidiary R&D mandate development: A matter of dual embeddedness," International Business Review, Elsevier, vol. 23(1), pages 76-90.
    6. Tina C Ambos & Sebastian H Fuchs & Alexander Zimmermann, 2020. "Managing interrelated tensions in headquarters–subsidiary relationships: The case of a multinational hybrid organization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(6), pages 906-932, August.
    7. Yamin, Mo & Andersson, Ulf, 2011. "Subsidiary importance in the MNC: What role does internal embeddedness play?," International Business Review, Elsevier, vol. 20(2), pages 151-162, April.
    8. Chatzopoulou, Erifili-Christina & Dimitratos, Pavlos & Lioukas, Spyros, 2021. "Agency controls and subsidiary strategic initiatives: The mediating role of subsidiary autonomy," International Business Review, Elsevier, vol. 30(3).
    9. Galli Geleilate, Jose-Mauricio & Andrews, Daniel S. & Fainshmidt, Stav, 2020. "Subsidiary autonomy and subsidiary performance: A meta-analysis," Journal of World Business, Elsevier, vol. 55(4).
    10. Reilly, Marty & Scott, Pamela Sharkey & Tippmann, Esther & Mangematin, Vincent, 2023. "Sustaining competence creation in the multinational enterprise: The role of piloting in subsidiaries," Journal of International Management, Elsevier, vol. 29(3).
    11. Marcus Matthias Keupp & Maximilian Palmié & Oliver Gassmann, 2011. "Achieving Subsidiary Integration in International Innovation by Managerial “Tools”," Management International Review, Springer, vol. 51(2), pages 213-239, April.
    12. Najafi-Tavani, Zhaleh & Giroud, Axèle & Andersson, Ulf, 2014. "The interplay of networking activities and internal knowledge actions for subsidiary influence within MNCs," Journal of World Business, Elsevier, vol. 49(1), pages 122-131.
    13. Florian Becker-Ritterspach & Christoph Dörrenbächer, 2011. "An Organizational Politics Perspective on Intra-firm Competition in Multinational Corporations," Management International Review, Springer, vol. 51(4), pages 533-559, August.
    14. Urmas Varblane & Katrin Männik & Helena Hannula, 2005. "Autonomy And Performance Of Foreign Subsidiaries In Transition Countries," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 38, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    15. Klaus E. Meyer & Chengguang Li & Andreas P. J. Schotter, 0. "Managing the MNE subsidiary: Advancing a multi-level and dynamic research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-39.
    16. Ciabuschi, Francesco & Dellestrand, Henrik & Kappen, Philip, 2012. "The good, the bad, and the ugly: Technology transfer competence, rent-seeking, and bargaining power," Journal of World Business, Elsevier, vol. 47(4), pages 664-674.
    17. Ciabuschi, Francesco & Forsgren, Mats & Martín Martín, Oscar, 2012. "Headquarters involvement and efficiency of innovation development and transfer in multinationals: A matter of sheer ignorance?," International Business Review, Elsevier, vol. 21(2), pages 130-144.
    18. Chiao, Yu-Ching & Ying, Kung-Pao, 2013. "Network effect and subsidiary autonomy in multinational corporations: An investigation of Taiwanese subsidiaries," International Business Review, Elsevier, vol. 22(4), pages 652-662.
    19. Urmas Varblane & Katrin M??nnik & Helena Hannula, 2005. "Autonomy and Performance of Foreign Subsidiaries in five Transition Countries," William Davidson Institute Working Papers Series wp780, William Davidson Institute at the University of Michigan.
    20. Dimitris Manolopoulos & Pavlos Dimitratos & Stephen Young & Spyros Lioukas, 2009. "Technology Sourcing and Performance of Foreign Subsidiaries in Greece: The Impact of MNE and Local Environmental Contexts," Management International Review, Springer, vol. 49(1), pages 43-60, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jomstd:v:46:y:2009:i:2:p:182-214. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2380 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.