Subsidiary strategy: The embeddedness component
This paper inductively derives a model that develops the concept of subsidiary embeddedness as the canvas within which subsidiary strategy can take place. Our model identifies three hierarchical levels of embeddedness: Operational embeddedness relates to the interlocking day-to-day relations. Capability embeddedness deals with the development of competitive capabilities for the multinational as a whole. Strategic embeddedness deals with subsidiary participation in the MNC strategy setting. We deem these three types of embeddedness as ways to develop subsidiary strategic alternatives. In as such, different types of subsidiary embeddedness imply different subsidiary roles. Embeddedness, as it was inductively derived from a revelatory case study, is not merely an outcome of the institutional setting, but a resource a subsidiary can manage by means of manipulating dependencies or exerting influence over the allocation of critical resources. A subsidiary can modify its embeddedness to change its strategic restraints. Therefore, the development of subsidiary embeddedness becomes an integral part of subsidiary strategy.
|Date of creation:||09 Jul 2007|
|Date of revision:|
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- Andersson, Ulf & Forsgren, Mats, 1996. "Subsidiary embeddedness and control in the multinational corporation," International Business Review, Elsevier, vol. 5(5), pages 487-508, October.
- Taggart, James & Hood, Neil, 1999. "Determinants of autonomy in multinational corporation subsidiaries," European Management Journal, Elsevier, vol. 17(2), pages 226-236, April.
- Birkinshaw, Julian & Hood, Neil & Young, Stephen, 2005. "Subsidiary entrepreneurship, internal and external competitive forces, and subsidiary performance," International Business Review, Elsevier, vol. 14(2), pages 227-248, April.
- Subramaniam, Mohan & Watson, Sharon, 2006. "How interdependence affects subsidiary performance," Journal of Business Research, Elsevier, vol. 59(8), pages 916-924, August.
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