Subsidiary contribution to the MNC – impact of strategic initiatives

Najla Podrug, Matea Kovač and Davor Filipović

Economic Research-Ekonomska Istraživanja, 2022, vol. 35, issue 1, 1345-1363

Abstract: The purpose of this paper is to investigate subsidiary strategic initiatives in the light of dynamic headquarters-subsidiary relations. The study is based on cross-sectional questionnaire survey data from 105 subsidiary top managers in subsidiaries located in Europe, Asia, and the USA within the ICT industry. The assumption of similar behavior by subsidiaries in the same industry is a sufficient motive for concentration on single industry. Theoretical contribution is reflected in the testing of models in subsidiaries within single rapidly growing turbulent industry that is abundant with hyper-competition and competitive dynamics, and where strategic initiatives are fundamental for survival, and by modeling variables in a different way than previously explored. Furthermore, the additional contribution is reflected in the conceptual model of the interdependence of subsidiaries and MNC in the process of subsidiary strategic initiatives, and besides providing a new perspective in this area, provides a framework for future research. The obtained results show that subsidiary networking and autonomy have a significant impact on subsidiary strategic initiatives whereas top management support and subsidiary innovativeness have no impact on the same variable. The results show that subsidiary strategic initiatives have a significant impact on its contribution to the multinational corporation (MNC).

Date: 2022
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DOI: 10.1080/1331677X.2021.1965001

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