One of These Things Is Not Like the Others: What Contributes to Dissimilarity Among Mne Subsidiaries' Political Strategy?

Zusammenfassung

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The paper studied why multinational enterprise (MNE) subsidiaries adopt dissimilar political strategies, and seek to advance the understanding of international political strategy from an MNE parent-subsidiary perspective. Drawing on the MNE parent-subsidiary literature, the paper contended factors at the subsidiary, corporate, and host country levels contribute to subsidiary political strategy dissimilarity. Hypotheses were tested with a sample of US MNE subsidiaries within Western Europe. The results demonstrate that dissimilarity in MNE subsidiary political strategy is attributed to a combination of subsidiary, corporate, and host country factors.

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Auszug

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One of These Things Is Not Like the Others: What Contributes to Dissimilarity Among Mne Subsidiaries' Political Strategy?

Introduction

Multinational enterprises (MNEs), defined as those corporations that "engage in foreign direct investment (FDI) and own or control value-adding activities in more than one country" (Dunning 1992, p. 1), have received a great deal of attention in the fields of international business and strategic management in the past several decades. Of key interest to MNE scholars and practitioners is how corporate strategy is managed across subsidiaries, often operating in diverse settings. Extant literature contends that subsidiary strategy is influenced by the need for local responsiveness, the demand for conformity with corporate-wide strategy, as well as subsidiaries' own capabilities (e.g. Bartlett/Ghoshal 1989, Birkinshaw/Hood 1998). Thus, MNE subsidiary strategy is generally believed to be the result of host country, parent, and subsidiary level determinants.

One characteristic that differentiates MNEs from purely domestic firms is that crossing national borders through trade, investments, or alternative modes of entry automatically adds a political dimension to their strategies (Boddewyn/Brewer 1994, Mudambi/Navarra 2003). Grosse and Behrman argue theories that fail to incorporate the political activities of MNEs take the "national" out of "inter-national" and leave the analysis "as a simple extension of firm and market theories" (1992, p. 97). Yet, while significant advancement has been made in understanding firms' market, or economic, strategies in foreign expansion (e.g. Buckley/Casson 1976), far less advancement has been made in understanding MNE political, or nonmarket, strategies, defined as proactive actions to affect the public policy environment in a way favorable to the firm (Baysinger 1984). Better knowledge regarding how MNEs formulate their international political strategy enhances understanding of MNEs' overall strategic profile and resulting success or failure (Boddewyn/Brewer 1994). In this paper, we explore factors that contribute to MNE subsidiary political strategy dissimilarity, or why a MNE subsidiary "does its own thing" and chooses political strategies different from those of other MNE subsidiaries.

Corporate political strategies are of increasing interest to strategy scholars, although such efforts are often restricted to the domestic context. Theories that do incorporate an international dimension ...

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