Managing The Multinational Subsidiary

This book, first published in 1986, is concerned with the changing world environment for multinational business and the relationships between multinational parent companies and their subsidiaries which will be necessary to meet the challenges that are being faced. The study argues that key changes to the environment are: the revolution in manufacturing which has permitted cheap production in one location of complicated products for a world market; ‘world product mandating’, whereby all a company’s country subsidiaries produce different product lines for the world market; pressure and incentives from host governments for technology transfer in their favour and for research and development facilities within their territory; the growth of highly efficient international trading and distribution intermediaries; and the complications of increased ‘barter’ trade arising from international debt problems and currency shortages. All this means that the management of multinational subsidiaries has to change. This book reviews the challenges and shows a way forward.

This monograph is based on an extensive dataset and a very well documented case study. Such a wealth of empirical material provides an ideal ground to test theories and enables the authors to elaborate interesting conceptualisations of some specific aspects of the broader network approach, particularly concerning the internationalisation of business networks. Anna Spadavecchia, Business History Combined with recent advances in network analysis [the book] can be instrumental in advancing our understanding, which will not only be useful for research scholars, but also provide practical guidance for managers. . . It is full of ideas which seem like deceptively simple black stones that in the hands of a skillful artisan can be turned into dazzling diamonds. Charles Dhanaraj, Journal of International Business Studies The work by Forsgren et al. offers a major contribution in terms of the analytical power of network relationships. By shifting to an exchange based perspective, they challenge the classical view of organizational power and control, but also the sources of organizational capabilities. They argue that the distinct capabilities and resources of the organization are developed through relationships and connections. Wilhelm Barner-Rasmussen, Rebecca Piekkari, Joanna Scott-Kennel and Catherine Welch, Academy of Management Perspectives An interesting and insightful book. It questions a lot of traditional thinking about international firms and the way they operate. Throughout the book, the reader is invited to develop a different perspective. This perspective might be called a relationships and networks theory of the firm. While this may sound familiar, the book goes well beyond anything I have seen in the existing literature, in terms of conceptualizing relationships and networks and in using this perspective to guide and interpret case study and survey research results. William G. Egelhoff, Fordham University, US It is now well accepted in the academic literature that the multinational corporation can be usefully modelled as a network of relationships. But it is less well-known that the origins of this perspective can be traced back to work done in Uppsala, Sweden, in the 1970s and 1980s. The term business network was first used there, and many important ideas around power and influence have also emerged from this research centre. In this new book, three of the key members of the Uppsala school develop a synthesis of the more recent ideas to come out of their research on networks. By focusing on the concept of the embedded multinational they show how the internal networks of the multinational interact with the web of external networks each subsidiary unit has in its local market. This book provides a definitive and compelling point of view of the importance of networking thinking to the study of the multinational corporation. It is an important book, and it will be widely cited in years to come. Julian Birkinshaw, London Business School, UK Forsgren, Holm, and Johanson have been among the leaders in developing the idea of the multinational firm as a network that spans different country environments. This perspective cautions the easy prescription that a multinational firm can do everything easily, if it just has the right organizational form. Relationships matter, as do the legitimacy of the firm in the context of its foreign investments. This book provides rich case insights into these dimensions. Bruce Kogut, INSEAD, France This book expands the business network view on managerial issues in multinational corporations. Specifically, it scrutinises the importance of a subsidiary s external and internal business network for its strategic and organizational role within the corporation. The internationalisation of firms in terms of management issues and headquarters control, the influence of subsidiaries on decisions and learning processes within multinational corporations are examined in detail. It is argued that

In the global business environment, new organizational forms come and go but in today's multinational corporations the headquarters-subsidiary link remains the primary channel by which the firm is managed. It facilitates strategy, control and coordination, and smoothes the progress of inter-unit product, personnel, factor and knowledge flows of every kind. Using data from CEOs of a large sample of Australian subsidiaries of foreign firms, this book brings new insights into the nature of this vital corporate relationship.

This book, first published in 1986, is concerned with the changing world environment for multinational business and the relationships between multinational parent companies and their subsidiaries which will be necessary to meet the challenges that are being faced. The study argues that key changes to the environment are: the revolution in manufacturing which has permitted cheap production in one location of complicated products for a world market; ‘world product mandating’, whereby all a company’s country subsidiaries produce different product lines for the world market; pressure and incentives from host governments for technology transfer in their favour and for research and development facilities within their territory; the growth of highly efficient international trading and distribution intermediaries; and the complications of increased ‘barter’ trade arising from international debt problems and currency shortages. All this means that the management of multinational subsidiaries has to change. This book reviews the challenges and shows a way forward.

Reflecting on the evolving organisation of multinational enterprises (MNEs) and their growing presence in international business, this book focuses on value creation by subsidiaries in transition economies, and uses Poland as an example. Drawing on internalisation and business network theory, the author analyses the role of the subsidiary with the aim of explaining the mechanisms of subsidiary functional specialisation and its operationalisation. The book presents an innovative model illustrating the determinants of the functional responsibilities of subsidiaries, whilst providing an empirical analysis of foreign subsidiaries in Poland. Addressing a vital topic in international business and management studies, this Palgrave Pivot will be useful for researchers, students and practitioners.

Managing the Contemporary Multinational explores the role of headquarters in different structures of multinational firms and shows how this role is affected by the complexity of contemporary research. This topical book illustrates that contemporary research has added complexity to the attributes of the multinational, with implications for the role of headquarters. It examines claims that subsidiaries contribute to the overall competitiveness of the corporation, that they are organized in corporate networks spanning country borders, and that they depend upon specific relationships in the external network. It is stressed that headquarters knowledge of the multinational and its business environment is crucial, but also problematic. The eminent contributors question whether headquarters have become more or less important given the complexity of contemporary research, and argue that the answer to this question depends on the theoretical foundation adopted in the multinational. Based on empirical studies, this invaluable book will be a captivating read for students and researchers interested in international business and international management.

Harzing (international management, U. of Bradford, UK) uses data from over 100 multinationals, headquartered in nine different countries, to examine the ways multinational corporations operate in the age of globalization. The book covers such topics as the structure and strategy of multinationals, the role of expatriates in controlling subsidiaries, the international transfer of managers, and international human resource management. Annotation copyrighted by Book News, Inc., Portland, OR