An Organizing Framework for Mnc Subsidiary Typologies

Zusammenfassung

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Existing multinational subsidiary typologies tend to be derived from strategy types, rather than from examining the subsidiaries themselves. However, there seems to be limited convergence of results. We propose a four-dimensional subsidiary framework to understanding the national subsidiary based on the subsidiary's roles in capability creation and capability utilization within the multinational firm as well as the geographic scope and product scope over which the subsidiary has influence. The paper shows that this approach, grounded in the basic strategic choices of market and activity scope at the subsidiary level, allows for an organization and unification of earlier conceptualizations of the national subsidiary in a way that lower dimensionality frameworks cannot. The resulting typology provides a rich set of possibilities for further theoretical and empirical development.

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An Organizing Framework for Mnc Subsidiary Typologies

Introduction

One of the crucial questions in international business research is how the multinational enterprise organizes and manages its international operations. Given the ever increasing regionalization and globalization trends, subsidiary roles and mandates have changed from being independent stand-alone operations to more integrated and interdependent networks (Ghoshal/Bartlett 1990, Rugman/Verbeke 2003). A growing stream of research in this vein focuses on the nature of national subsidiaries and the roles that subsidiaries play in the strategies of multinational enterprises (Birkinshaw/Hood 1998). A number of researchers have developed typologies that attempt to identify the salient features that distinguish subsidiaries (e.g., White/ Poynter 1984, Bartlett/Ghoshal 1986, Gupta/Govindarajan 1991). While much of the early research has been conceptual, some researchers have tried to validate subsidiary typologies empirically (Leong/Tan 1993, Birkinshaw/Morrison 1995, Taggart 1997, 1998, Harzing 2000). Recent research has largely focused on the structural aspects of the MNC, particularly the mechanisms of coordination and control to classify MNC subsidiaries (Taggart 1997, Birkinshaw et al. 2000), or on examining specific roles of subsidiaries such as Centers of Excellence (Frost/ Birkinshaw/Ensign 2002), or on studying how such subsidiary roles are gained or lost (Birkinshaw 1996, 1997, Birkinshaw/Hood 1998). Such approaches assume that the typologies are empirically verified phenomena that are now appropriate for further theoretical development and the accompanying subsidiary roles reflect the underlying spectrum of subsidiary roles.

Despite a growing amount of work on subsidiary typologies, there seems to be limited convergence of results. Different researchers use different sets of dimensions to generate their typologies. In most cases, researchers have opted for two dimensions to try to capture what essentially is a phenomenon that can vary across several dimensions. Empirical studies at the subsidiary level often focus on the overall strategy, structure or systems of the multinational firm, and only indirectly on subsidiary type. The studies that focus directly on subsidiary types try to test the empirical validity of some specific typology (Leong/Tan 1993 or Harzing 2000), or in some cases how such roles may be gained by a subsidiary (Birkinshaw 1996, 1997). More often, such research uses limited research frames, giving rise to the potential for idiosyncratic results. While each of the limited research frames or strategy typologies provides some insight into subsidiary roles, an integrated view of the different roles that subsidiaries can play in a world of increasing regionalization and globalization is yet to be seen in the literature.

In order to understand the nature of the existing typologies, one needs to understand the mechanics of typology development, and the patterns of typology development in the field of subsidiary research. We attempt to examine the nature of typology development and its application to MNC subsidiaries. The present paper proposes a four-dimensional approach to understanding the national subsidiary's role within the MNC. This approach is grounded in theory and specifically, in the basic strategic choices any firm faces - those about markets and capabilities that determine the nature of the firm. In particular, we attempt to distinguish subsidiar...

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