The Determinants and Consequences of Subsidiary Initiative in Multinational Corporations

Julian Birkinshaw

Entrepreneurship Theory and Practice, 1999, vol. 24, issue 1, 9-36

Abstract: This paper examines corporate entrepreneurship in multinational corporations through a detailed study of initiatives taken by foreign subsidiaries. We develop a theoretical model in which two levels of organizational context (corporate and subsidiary) promote or suppress subsidiary initiative, and initiative in turn has a feedback effect on both subsidiary and corporate context. Using a multi-method study (229 questionnaire returns plus 5 in-depth case studies), the key findings are as follows: Subsidiary initiative is promoted by a high level of distinctive subsidiary capabilities, and is suppressed by a high level of decision centralization, a low level of subsidiary credibility, and a low level of corporate-subsidiary communication. Over time, we find evidence that subsidiary initiative leads to an enhancement of credibility (vis-Ã -vis the head office), head office openness, corporate-subsidiary communication, and distinctive capabilities.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:24:y:1999:i:1:p:9-36

DOI: 10.1177/104225879902400102

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