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The MNC as an externally embedded organization: An investigation of embeddedness overlap in local subsidiary networks

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  • Nell, Phillip C.
  • Ambos, Bjérn
  • Schlegelmilch, Bodo B.
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    Abstract

    MNCs have been conceptualized as differentiated networks that, in turn, are embedded in external networks. Previous research has predominantly focused on the embeddedness of established subsidiaries into their local environment, omitting to shed light on the phenomenon of headquarters linkages to the local context which creates embeddedness overlap. We develop a model of why MNCs develop overlapping linkages to local subsidiary networks even if the subsidiaries have grown out of the initial start-up phase. Using detailed information on 168 European subsidiaries, we find that MNCs build and maintain more overlapping network ties when subsidiaries are high performers, hold important resources, operate in turbulent environments, and are closely connected to multinational actors as opposed to purely domestic firms.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of World Business.

    Volume (Year): 46 (2011)
    Issue (Month): 4 (October)
    Pages: 497-505

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    Handle: RePEc:eee:worbus:v:46:y:2011:i:4:p:497-505

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    Related research

    Keywords: External relationships Multinationals Embeddedness;

    References

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    Cited by:
    1. Colakoglu, Saba & Yamao, Sachiko & Lepak, David P., 2014. "Knowledge creation capability in MNC subsidiaries: Examining the roles of global and local knowledge inflows and subsidiary knowledge stocks," International Business Review, Elsevier, vol. 23(1), pages 91-101.
    2. 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.
    3. Perri, Alessandra & Andersson, Ulf & Nell, Phillip C. & Santangelo, Grazia D., 2013. "Balancing the trade-off between learning prospects and spillover risks: MNC subsidiaries’ vertical linkage patterns in developed countries," Journal of World Business, Elsevier, vol. 48(4), pages 503-514.

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