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The effects of spatial and contextual factors on headquarters resource allocation to MNE subsidiaries
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Business Studies.
2012 (English)In: Journal of International Business Studies, ISSN 0047-2506, E-ISSN 1478-6990, Vol. 43, no 3, 219-243 p.Article in journal (Refereed) Published
Abstract [en]

Subsidiaries of multinational enterprises are located in a range of environments, in which they are exposed to organizational, national, and sub-national characteristics. Instead of being distributed equally, economic resources are agglomerated in specific countries, or even regions, and the subsidiaries located in these different environments have a heterogeneous resource configuration. This implies that dimensions of space related to geography and subsidiary network relationships may affect how the firm is managed. This paper investigates how spatial and contextual distance within multinational enterprises affects headquarters resource allocation to specific innovation transfer projects between subsidiaries. In brief, the results suggest that sub-national factors, such as the structure of the subsidiary network, offer a strong explanation for headquarters resource allocation. Positive and negative effects of national factors were also found, which implies that distance matters for headquarters resource allocation activities. By integrating the organizational and geographic dimensions, this paper contributes to knowledge about the drivers of headquarters resource allocation to subsidiaries, thereby extending theories related to how subsidiaries can evolve within the multinational enterprise with support from headquarters.

Place, publisher, year, edition, pages
2012. Vol. 43, no 3, 219-243 p.
Keyword [en]
multinational corporations (MNCs) and enterprises (MNEs), distance, embeddedness, resource allocation, headquarters–subsidiary roles and relations, innovation transfer
National Category
Business Administration
Research subject
Business Studies
Identifiers
URN: urn:nbn:se:uu:diva-161528DOI: 10.1057/jibs.2011.57ISI: 000301819600002OAI: oai:DiVA.org:uu-161528DiVA: diva2:456430
Available from: 2011-11-14 Created: 2011-11-14 Last updated: 2017-12-08Bibliographically approved
In thesis
1. Orchestrating Innovation in the Multinational Enterprise: Headquarters Involvement in Innovation Transfer Projects
Open this publication in new window or tab >>Orchestrating Innovation in the Multinational Enterprise: Headquarters Involvement in Innovation Transfer Projects
2010 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

In the past several decades research has emphasized innovation development and transfer as key issues when investigating the multinational enterprise (MNE). This thesis focuses on the question of what factors make headquarters involve itself in innovation transfer projects taking place between a sending and a receiving subsidiary within the MNE. This relates to headquarters active participation and role in the organization of resources (structure) and flows (processes) within the MNE.

Using a database covering 169 innovation transfer projects the empirical analysis reveals that distances influence headquarters involvement, albeit in different directions. Systematic differences based on subsidiary and innovation characteristics and headquarters involvement is found. Not only subsidiary characteristics are of importance for headquarters involvement, but also the embeddedness of the subsidiary hosting the innovation transfer project.

More specifically, physical and cultural distance between the sending and receiving subsidiaries influence headquarters involvement in the transfer negatively, whereas linguistic and economic distance between the subsidiaries conducting the transfer have a positive influence on headquarters involvement in innovation transfer. Looking more closely at the innovations subject to transfer the results suggests that innovations perceived as complex and important are favored for headquarters support. The same is true for innovations that are related to the core business of the subsidiary. At a subsidiary level, powerful subsidiaries initially receive more of headquarters support, but as subsidiary power increase, headquarters becomes less involved, i.e., a curvilinear effect of power is found. Acquired subsidiaries tend to become favored for headquarters involvement in transfer relative to greenfield subsidiaries. Finally, the results indicate that headquarters involves itself in transfer projects when the subsidiaries hosting the transfer projects have been relationally embedded during the innovation development phase.

Theoretically, headquarters involvement can be conceptualized as orchestration of innovations within the MNE, and as a form of resource allocation. Thus, this thesis contributes to the understanding of what influences intra-MNE resource allocation, as well as what factors capture the attention of headquarters leading to innovation orchestration. Headquarters involvement in innovation transfer has implications for setting subsidiaries on evolutionary trajectories.

Publisher
105 p.
Series
Doctoral thesis / Företagsekonomiska institutionen, Uppsala universitet, ISSN 1103-8454 ; 147
Keyword
Multinational enterprise, headquarters-subsidiary relationships, innovation transfer, involvement, orchestration, resource allocation, attention, subsidiary evolution
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:uu:diva-124206 (URN)
Public defence
2010-06-09, Hörsal 2, Ekonomikum, Kyrkogårdsgatan 10, Uppsala, 13:15 (English)
Opponent
Supervisors
Available from: 2010-05-18 Created: 2010-05-03 Last updated: 2012-04-16

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Dellestrand, HenrikKappen, Philip

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