Subsidiary Role, Evolution & Power

Question 1

Definition of a Subsidiary.

Answer 1

“A subsidiary of any operational unit controlled by the MNE and situated outside the home country. In some cases, there will be a single subsidiary in the host country; in other cases, there will be several.”

Question 2

Subsidiary Roles

Answer 2

> receptive subsidiary
active subsidiary
autonomous subsidiary

Question 3

Subsidiary Mandate Types

Answer 3

-World Mandate
-Specialist Contributor
-Local Implementer

Question 4

Subsidiary Evolution

Answer 4

-(PDI) Parent-driven investment (parent initiative)
-(SDE) Subsidiary-driven charter extension (subsidiary initiative)
-(SDR) Subsidiary-driven charter reinforcement
-(PDD) Parent-driven divestment
-(ASN) Atrophy through subsidiary neglect

Question 5

Subsidiary initiative

Answer 5

“Proactive, autonomous & risk-taking activities that originate outside the home country in a foreign subsidiary of a (MNC) and a re initiated by actors in the subsidiary”

Question 6

Types of Subsidiary Intiatives.

Answer 6

-the locus origin (evolution internally & externally)
-the locus of application (globally & local)
> Application internally: organizational development
>Application externally: Market development
-domain developing initiatives
-domain consolidating initatives
- domain defending intiatives

Question 7

HQ & Subsidiary Relationbship

Answer 7

The control over resources plays a major role, in the degree of the subsidiary’s independence.

Question 8

Variables that contribute to subsidiary’s power

Answer 8

-control of uncertainty
-network centrality
-position/role in org. division of labor/value chain
-resources held (VRIN) & resource dependence
-formal authority of unit