Subsidiary strategy: The embeddedness component

Carlos Garcia-Pont (), Juan I. Canales and Fabrizio Noboa
Additional contact information
Carlos Garcia-Pont: IESE Business School, Postal: Av Pearson 21, 08034 Barcelona, SPAIN
Juan I. Canales: University of St. Andrews

No D/699, IESE Research Papers from IESE Business School

Abstract: This paper inductively derives a model that develops the concept of subsidiary embeddedness as the canvas within which subsidiary strategy can take place. Our model identifies three hierarchical levels of embeddedness: Operational embeddedness relates to the interlocking day-to-day relations. Capability embeddedness deals with the development of competitive capabilities for the multinational as a whole. Strategic embeddedness deals with subsidiary participation in the MNC strategy setting. We deem these three types of embeddedness as ways to develop subsidiary strategic alternatives. In as such, different types of subsidiary embeddedness imply different subsidiary roles. Embeddedness, as it was inductively derived from a revelatory case study, is not merely an outcome of the institutional setting, but a resource a subsidiary can manage by means of manipulating dependencies or exerting influence over the allocation of critical resources. A subsidiary can modify its embeddedness to change its strategic restraints. Therefore, the development of subsidiary embeddedness becomes an integral part of subsidiary strategy.

Keywords: Multinational management; subsidiary; strategy; organization (search for similar items in EconPapers)
Pages: 26 pages
Date: 2007-07-09
New Economics Papers: this item is included in nep-cse and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Subsidiary Strategy: The Embeddedness Component (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:iesewp:d-0699

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