How subsidiaries gain power in multinational corporations

Ram Mudambi, Torben Pedersen and Ulf Andersson

Journal of World Business, 2014, vol. 49, issue 1, 101-113

Abstract: This study focuses on how power is gained within large organizations, such as the intra-organizational network of MNCs. Drawing on resource dependence literature, this study develops and empirically tests a set of hypotheses aimed at explaining the multifaceted nature of power and decision making in multinational firms. Data collected from 2107 foreign-owned subsidiaries in seven European countries is used to test the hypotheses. The results indicate that mutual dependence and dependence imbalance provide strong explanations for subsidiary power. Furthermore, subsidiary power over strategic decisions in the MNC is gained through functional power, notably the possession of technological, rather than business-related, power or by the possession of both as they reinforce each other in strengthening the subsidiary's strategic power in the MNC network.

Keywords: Subsidiary functional- and strategic power; Subsidiary resources; Resource dependence theory (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (37)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:worbus:v:49:y:2014:i:1:p:101-113

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DOI: 10.1016/j.jwb.2013.02.001

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