Resources, environmental change, and survival: asymmetric paths of young independent and subsidiary organizations (original) (raw)
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Using network approaches to subsidiary theory, this paper investigates the impact on performance of interactions between the factors of autonomy, intra and inter-organizational network relationships. The paper analyzes both direct and indirect interactions between these factors. This study develops and extends existing research that use network based approaches to the study of subsidiary performance by considering the role of autonomy as well as network relationships. In addition the study examines changes in the interactions between the main factors rather than the levels of these factors. Examination of the interactions between changes in autonomy and networks and the subsequent impact on performance provides a framework for obtaining evidence on how these interactions affect changes in performance and thereby contributes towards a better understanding of the evolution of subsidiaries. The results of the data analysis, gathered from a survey of 350 foreign owned subsidiaries in the UK, Germany and Denmark, reveals evidence of the complex interactions between increases in autonomy and in network relationships and the subsequent impact on performance. The results also highlight the central role of interorganizational network relationships in the interaction between the factors that produce significant and positive effects.
The Consequences of Subsidiaries' Strategic Initiatives: A Resource- Dependence Perspective
2008
In this paper, we adopt a resource-dependence perspective to shed light on the consequences of subsidiary’s strategic initiatives. We investigate how a subsidiary’s strategic initiatives contribute to its bargaining power, and how headquarters intervention – through granting attention or monitoring – affects the realization of its goals. Using structural equation modeling, our hypotheses are tested by drawing on a sample of subsidiaries located in three different countries. Our results show that subsidiaries are not able to increase their inter-unit power through initiatives unless they get headquarters attention. Subsidiary initiatives have a direct effect on subsidiary autonomy but the caveat is that initiatives also evoke headquarters monitoring, which in turn decreases the subsidiary’s autonomy. Acknowledgment: Support from the Advanced Institute of Management Research (AIM), is gratefully acknowledged. Tina C. Ambos Vienna University of Economics and Business Administration Aug...
The impact of increases in subsidiary autonomy and network relationships on performance
International Business Review, 2012
This paper uses network approaches to subsidiary theory to investigate the performance impacts of interactions among the factors of autonomy, intra-organizational network relationships, and inter-organizational network relationships. The paper offers an analysis of both direct and indirect interactions among these factors. This study develops and extends existing research that uses network-based approaches in studies of subsidiary performance by considering the roles of autonomy and network relationships. In addition, the study examines changes in terms of increases in the interactions between the main factors rather than the levels of these factors. The examination of the interactions between increases in autonomy and networks and the subsequent impact of this change on performance contributes to a better understanding of subsidiary evolution. The results, which are based on data gathered from a survey of 350 foreign-owned subsidiaries in the UK, Germany, and Denmark, reveal complex interactions between increases in autonomy and network relationships, and the subsequent impact of these changes on performance. The results also highlight the central role of inter-organizational network relationships in the interaction between the factors, which produce significant and positive effects. ß
-2 2010 De Jong & Vo The impact of institutional environments on subsidiary autonomy
The subsidiary is playing an increasingly important role in generating competitive advantage for MNCs. The key objective of this study is to empirically disentangle the underlying causal structure that determines the autonomy of subsidiaries. We argue that the division of decision-making authority between the headquarter and the operational unit primarily responds to the institutional contexts of both, the parent company and the subsidiary. This is because an MNC is a governance structure that operates affiliates in many and widely different institutional contexts. Our propositions are tested on a database that includes 263 European subsidiaries of 18 MNCs in 25 European countries. The empirical results support our institutional perspective and show that the subsidiary's autonomy is strongly associated with the global strategy of the parent firm and the national business system in which the affiliate is embedded. The results hold while controlling for various key characteristics of the parent firm and for the subsidiary.
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The text offers a review of the perspectives of Institutional and Resource Dependence, and shows a practical application based on the analysis of organizational strategic adaptation in the case study of a family-run furniture manufacturer and retailer. While the institutional perspective emphasizes environmental determinism as an influencer of the organization's strategic responses, the Resource Dependence perspective emphasizes voluntarism as a key aspect in the response of organizational decision makers. The key factors for the study of strategies proposed in the adaptation process range from the degree of organizational compliance, dictated by the former, to resistance to institutional pressures, explained by the latter. This article aimed to show that in the process of organizational adaptation, both are important aspects of the decision making of organizational leaders. This research is of the exploratory type, with a qualitative approach. This type of approach involves int...
Using meta-analysis, we consolidate 157 tests of RDT and corroborate its main predictions: organizations respond to resource dependencies by forming interorganizational arrangements like interlocks, alliances, joint ventures, in-sourcing arrangements, and mergers and acquisitions. In turn, these arrangements make them more autonomous and more legitimate. We also extend RDT in three ways. First, we "unpack" the theory by showing that the mechanisms linking arrangement formation to organizational autonomy and legitimacy differ across arrangements. Second, we address the question whether RDT is also a theory of organizational performance. We find that whereas autonomy positively mediates the relationship between arrangement formation and performance, legitimacy does not. This suggests that RDT can also explain organizational actions that have societal acceptance rather than economic performance as an ulterior motive. Third, we assess whether competition law is a boundary condition to RDT's prescriptions. Specifically, we show that the adoption of the Horizontal Merger Guidelines in the U.S. has caused organizations to "flee" from mergers to less regulated arrangements like alliances and joint ventures, and has hurt the profitability of the remaining mergers.
Autonomy, Embeddedness, and the Performance of Foreign Owned Subsidiaries
Multinational Business Review, 2008
This paper investigates whether changes in autonomy and embeddedness in host locations by foreign owned subsidiaries are associated with improvements in performance by subsidiaries. The results provide evidence that increasing operational decision-making autonomy is associated with enlianced performance as measured by both subjective and more objective measures of performance. The results on the importance of increasing strategic decision-making autonomy and embeddedness are less clear, with improved performance being detected in some cases, but only for the subjective measure of performance.
Autonomy, networking and interunit learning in a model of MNC subsidiary innovation and performance
Australian School of Business …, 2001
The objective of our research is to understand the environmental and organizational factors in international business that lead to the desirable outcomes of interunit learning, innovation and overall performance. Since marketing plays a critical role in the global strategies of multinational firms, and is one of the first corporate functions to be internationalized, we study these factors in the context of the marketing function. Using a model tested with data collected through a survey of managers in subsidiaries of multinational firms, we show that the effects of autonomy of decision making, networking interaction and interunit learning are complex and imply the need for all to be working together to generate innovation and performance. Ceteris paribus, innovative and higher performing subsidiaries belong to firms that have achieved greater autonomy, networking and interunit learning. We also suggest that pressure for global integration mostly impacts on the firm's decision to grant more or less autonomy to its subsidiaries. In contrast, pressure for local responsiveness acts primarily to condition local subsidiary performance and has little impact on the firm's global decisions about either autonomy or networking.
Performance Effects of Subsidiary Developments in Collaboration, and Decision Making Power
The paper investigates the consequences of interactions between autonomy, intra and inter-organizational networks for the performance of subsidiaries. Furthermore, the paper analyzes the impact of changes in autonomy and network relationships rather than investigating levels. This introduces the concept of adjustment of subsidiary strategies to changes in the international and host country business environment. Based on a survey of 350 foreign owned subsidiaries located in the UK, Germany and Denmark, we find evidence that increases in the inter-organizational network relationships of subsidiaries lead to increased subsidiary performance. Further, increased subsidiary autonomy positively affects subsidiary interorganizational network relationships, and to some degree negatively affects intra-organizational network relationships. Finally, overlapping effects between inter-and intra-organizational network relationships are found.