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Fighting for power: The strategy of global MNCs' subsidiaries

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  • Garcia-Pont, Carlos

    (IESE Business School)

  • Noboa, Fabrizio

    (IESE Business School)

Abstract

The purpose of this paper is to examine the relational configurations of a subsidiary that belongs to a global industry such as auto components manufacture. As global integration pressures are high in this environment, there are pressures for centralization and some subsidiaries are losing resources and capabilities to the benefit of headquarters or other subsidiaries. Consequently, they may fight within the MNC to retain control over certain resources and capabilities, mainly by building strong relationships with local suppliers, providers, customers or other units of the MNC that may reach global relevance. While previous studies have identified the significance of networks as a metaphor for understanding MNC structure, in this paper we attempt to show how analysis of a subsidiary's networks of contacts can be a useful tool to identify the role the subsidiary is playing in the multinational as a whole. It shows how networks can be used by the subsidiary as a tool to proactively develop a formulated strategy.

Suggested Citation

  • Garcia-Pont, Carlos & Noboa, Fabrizio, 2003. "Fighting for power: The strategy of global MNCs' subsidiaries," IESE Research Papers D/489, IESE Business School.
    • Handle: RePEc:ebg:iesewp:d-0489
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    File URL: http://www.iese.edu/research/pdfs/DI-0489-E.pdf
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    References listed on IDEAS

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    1. Paterson, S. L. & Brock, D. M., 2002. "The development of subsidiary-management research: review and theoretical analysis," International Business Review, Elsevier, vol. 11(2), pages 139-163, April.
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    3. Thomas W Malnight, 1996. "The Transition from Decentralized to Network-Based MNC Structures: An Evolutionary Perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(1), pages 43-65, March.
    4. Jon I Martinez & J Carlos Jarillo, 1989. "The Evolution of Research on Coordination Mechanisms in Multinational Corporations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 20(3), pages 489-514, September.
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    Keywords

    subsidiary; relationship network; resource configuration; auto components;
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