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Managing the transfer of capabilities within multinational corporations:: the dual role of the subsidiary

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  • Andersson, Ulf

Abstract

In this article, the relation is explored between the external technical embeddedness of the subsidiary, its assigned role, and capability development in the MNC. It is argued that assigning roles of responsibility or mandates to certain subsidiaries can effect integration of subsidiary-developed knowledge in the MNC. Departing from literature on the market-as-networks perspective and writings from recent years on subsidiary roles, hypotheses are developed and a model outlined. The model describes a significant link between the external technical embeddedness of the subsidiary and its assigned role within the MNC, and a significant relation between the subsidiary's assigned role and its importance for other units' capability development. The model is tested on a sample of 97 subsidiaries using the LISREL 8.3 statistical method. The final model implies that by assigning specific roles to different subsidiaries, headquarters can exploit the knowledge developed in the external environments of these subsidiaries.

Suggested Citation

  • Andersson, Ulf, 2003. "Managing the transfer of capabilities within multinational corporations:: the dual role of the subsidiary," Scandinavian Journal of Management, Elsevier, vol. 19(4), pages 425-442, December.
    • Handle: RePEc:eee:scaman:v:19:y:2003:i:4:p:425-442
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    Cited by:

    1. Urmas Varblane & Katrin Männik & Helena Hannula, 2006. "The autonomy of managers by business functions in the foreign subsidiaries from transition countries," University of Tartu - Faculty of Economics and Business Administration, in: Tõnis Mets & Janita Andrijevskaja & Urve Venesaar & Ene Kolbre (ed.), Entrepreneurship in Estonia: policies, practices, education and research, edition 1, volume 28, chapter 9, pages 172-193, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    2. Iivari Bäck & Marko Kohtamäki, 2016. "Joint Learning in Innovative R&D Collaboration," Industry and Innovation, Taylor & Francis Journals, vol. 23(1), pages 62-86, January.
    3. Mair, Johanna & Marti, Ignasi, 2004. "Social entrepreneurship: What are we talking about? A framework for future research," IESE Research Papers D/546, IESE Business School.
    4. 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.
    5. 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.
    6. White, George O. & Rajwani, Tazeeb & Krammer, Sorin M.S., 2022. "Legal distance and entrepreneurial orientation of foreign subsidiaries: Evidence from Southeast Asia," Journal of World Business, Elsevier, vol. 57(6).
    7. Athreye, Suma & Batsakis, Georgios & Singh, Satwinder, 2016. "Local, global, and internal knowledge sourcing: The trilemma of foreign-based R&D subsidiaries," Journal of Business Research, Elsevier, vol. 69(12), pages 5694-5702.
    8. Albis, Nadia & Álvarez, Isabel & García, Aura, 2021. "The impact of external, internal, and dual relational embeddedness on the innovation performance of foreign subsidiaries: Evidence from a developing country," Journal of International Management, Elsevier, vol. 27(4).
    9. Suma Athreye & Georgios Batsakis & Satwinder Singh, 2013. "Subsidiary Embeddedness is a Strategic Choice: Complementarity and the factors associated with different types of embeddedness," DRUID Working Papers 13-05, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    10. Zhang, Feng & Jiang, Guohua & Cantwell, John A., 2019. "Geographically Dispersed Technological Capability Building and MNC Innovative Performance: The Role of Intra-firm Flows of Newly Absorbed Knowledge," Journal of International Management, Elsevier, vol. 25(3), pages 1-1.

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