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Product development in MNC subsidiaries: Local linkages and global interdependencies

  • Boehe, Dirk Michael
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    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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    File URL: http://www.sciencedirect.com/science/article/pii/S1075425307000853
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    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 13 (2007)
    Issue (Month): 4 (December)
    Pages: 488-512

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    Handle: RePEc:eee:intman:v:13:y:2007:i:4:p:488-512
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    1. Maurizio Sobrero & Edward B. Roberts, 2001. "The Trade-off Between Efficiency and Learning in Interorganizational Relationships for Product Development," Management Science, INFORMS, vol. 47(4), pages 493-511, April.
    2. Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
    3. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
    4. Holm, Ulf & Sharma, D. Deo, 2006. "Subsidiary marketing knowledge and strategic development of the multinational corporation," Journal of International Management, Elsevier, vol. 12(1), pages 47-66, March.
    5. Gupta, Anil K. & Govindarajan, V., 1994. "Organizing for knowledge flows within MNCs," International Business Review, Elsevier, vol. 3(4), pages 443-457, December.
    6. Schmid, Stefan & Schurig, Andreas, 2003. "The development of critical capabilities in foreign subsidiaries: disentangling the role of the subsidiary's business network," International Business Review, Elsevier, vol. 12(6), pages 755-782, December.
    7. Andersson, Ulf & Forsgren, Mats, 1996. "Subsidiary embeddedness and control in the multinational corporation," International Business Review, Elsevier, vol. 5(5), pages 487-508, October.
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