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Product development in MNC subsidiaries: Local linkages and global interdependencies

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  • Boehe, Dirk Michael

Abstract

The aim of this paper is to identify and explain how different forms of local linkages vary across different patterns of global workflow interdependence in MNC subsidiaries' product development activities. Both global workflow interdependence and local linkages are essential for innovating and long-term success of a subsidiary. This paper's theoretical approach differs from previous MNC research in that we combine the tightly coupled (or rational) network model with the more common loosely coupled (or differentiated, federative) network model. Empirical data was obtained from subsidiaries in Brazil using web-survey design. Our findings show a positive relationship between local outsourcing linkages and global workflow interdependence in product development provided local cooperative linkages are low. Furthermore, results suggest empirical support for the tightly coupled model and its extension, the adaptively rational model proposed by Astley and Zajec [Astley, W.G., Zajac, E.J., 1991. Intraorganizational power and organizational design: reconcilling rational and coalitional models of organization. Organization Science 2 (4), 104-113.]. Accordingly, our study implies that the more subsidiaries create dependent and counter-dependent relationships, the better they will be positioned within their MNC innovation network and the more pronounced their innovative activities shall be.

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  • Boehe, Dirk Michael, 2007. "Product development in MNC subsidiaries: Local linkages and global interdependencies," Journal of International Management, Elsevier, vol. 13(4), pages 488-512, December.
  • Handle: RePEc:eee:intman:v:13:y:2007:i:4:p:488-512
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    Cited by:

    1. Zhang, Feng & Jiang, Guohua & Cantwell, John A., 2015. "Subsidiary exploration and the innovative performance of large multinational corporations," International Business Review, Elsevier, vol. 24(2), pages 224-234.
    2. Dörrenbächer, Christoph & Gammelgaard, Jens, 2010. "Multinational corporations, inter-organizational networks and subsidiary charter removals," Journal of World Business, Elsevier, vol. 45(3), pages 206-216, July.
    3. Collinson, Simon C. & Wang, Rowena, 2012. "The evolution of innovation capability in multinational enterprise subsidiaries: Dual network embeddedness and the divergence of subsidiary specialisation in Taiwan," Research Policy, Elsevier, vol. 41(9), pages 1501-1518.
    4. Giroud, Axèle & Scott-Kennel, Joanna, 2009. "MNE linkages in international business: A framework for analysis," International Business Review, Elsevier, vol. 18(6), pages 555-566, December.
    5. Andrea Caragliu & Camilla Lenzi & Miroslav Šipikal & Milan Buček, 2013. "The role of FDIs in regional innovation: Evidence from the automotive industry in Western Slovakia," Regional Science Policy & Practice, Wiley Blackwell, vol. 5(4), pages 475-490, November.
    6. Tsai-Ju Liao & Chwo-Ming Yu, 2013. "The impact of local linkages, international linkages, and absorptive capacity on innovation for foreign firms operating in an emerging economy," The Journal of Technology Transfer, Springer, vol. 38(6), pages 809-827, December.
    7. Adelheid Holl & Ruth Rama, 2014. "Foreign Subsidiaries and Technology Sourcing in Spain," Industry and Innovation, Taylor & Francis Journals, vol. 21(1), pages 43-64, January.
    8. Liu, Ju, 2014. "How Do Geographical and Organisational Proximity Influence the Relational Pattern of MNCs’ Global Innovation Networks: An In-depth Case Study," Papers in Innovation Studies 2014/16, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    9. Peerally J.A. & Figueiredo P.N., 2013. "Technological capability building in MNE-Related social businesses of less developed countries : the experience of Grameen-Danone foods in Bangladesh," MERIT Working Papers 036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Boehe, Dirk Michael, 2011. "Collaborate at home to win abroad: How does access to local network resources influence export behavior?," Insper Working Papers wpe_248, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    11. Igor Gurkov & Sergey Filippov, 2013. "Innovation processes in the Russian manufacturing subsidiaries of MNCs – an integrated view from case studies," HSE Working papers WP BRP 11/MAN/2013, National Research University Higher School of Economics.
    12. Arza, Valeria & van Zwanenberg, Patrick, 2014. "The Politics of Technological Upgrading: International Transfer to and Adaptation of GM Cotton in Argentina," World Development, Elsevier, vol. 59(C), pages 521-534.
    13. Baier, Elisabeth & Rammer, Christian & Schubert, Torben, 2015. "The Impact of Captive Innovation Offshoring on the Effectiveness of Organizational Adaptation," Journal of International Management, Elsevier, vol. 21(2), pages 150-165.
    14. Ale Ebrahim, Nader & Ahmed, Shamsuddin & Taha, Zahari, 2008. "Virtual teams: A literature review," MPRA Paper 27001, University Library of Munich, Germany, revised Jan 2009.
    15. Baier , Elisabeth & Rammer , Christian & Schubert , Torben, 2013. "The Impact of Innovation Off-shoring on Organizational Adaptability," Papers in Innovation Studies 2013/44, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    16. Edwards, Tony & Tempel, Anne, 2010. "Explaining variation in reverse diffusion of HR practices: Evidence from the German and British subsidiaries of American multinationals," Journal of World Business, Elsevier, vol. 45(1), pages 19-28, January.
    17. Nell, Phillip C. & Ambos, Bjérn & Schlegelmilch, Bodo B., 2011. "The MNC as an externally embedded organization: An investigation of embeddedness overlap in local subsidiary networks," Journal of World Business, Elsevier, vol. 46(4), pages 497-505, October.
    18. Figueiredo P.N., 2013. "Beyond technological catch‐up : An empirical investigation of further innovative capability accumulation outcomes in latecomer firms with evidence from Brazil," MERIT Working Papers 048, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    19. 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.
    20. Ale Ebrahim, Nader & Ahmed, Shamsuddin & Taha, Zahari, 2008. "Virtuality, Innovation and R&D Activities," MPRA Paper 27267, University Library of Munich, Germany, revised 12 Apr 2009.
    21. Elisa Giuliani & Chiara Macchi, 2013. "Multinational Corporations’ Economic And Human Rights Impacts On Developing Countries: A Review And Research Agenda," Discussion Papers 2013/158, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    22. Ale Ebrahim, Nader & Ahmed, Shamsuddin & Taha, Zahari, 2009. "Innovation and R&D Activities in Virtual Team," MPRA Paper 27033, University Library of Munich, Germany, revised 17 Jul 0209.

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