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Subsidiary entrepreneurship and headquarters involvement during innovation development: Dual paths to subsidiary performance
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.
2011 (English)In: Entrepreneurship in the Global Firm / [ed] Verbek, A., Tavares-Lehmann, T. & Van Tulder, R., UK: Emerald Group Publishing Limited, 2011, 139-166 p.Chapter in book (Refereed)
Abstract [en]

Purpose – The chapter aims at enhancing our understanding on how the headquarters involvement and subsidiary entrepreneurship during the innovation development process of multinational corporation (MNC) subsidiaries affect the outcome of the innovation in terms of their home market- and organisational performance.

Design/methodology/approach – The study is based on cross-sectional questionnaire survey data from 87 innovation projects in 64 MNC subsidiaries located in Europe, East Asia and the United States.

Findings – Subsidiary entrepreneurship during the innovation process has a positive impact on the subsidiary's market performance and a negative impact on its organisational performance, whereas the involvement of corporate headquarters has a negative impact on the market performance, and a positive impact on the organisational performance.

Research implications – The research provides a starting point for further research on the relationship between the management of innovation processes among MNC subsidiaries and the performance outcomes of such processes.

Practical implications – The study implies that there is a need for corporate managers to take into account the entrepreneurial endeavour of subsidiaries when formulating corporate innovation strategies.

Originality/value: Integrates a top-down and bottom-up perspective on the strategic management of innovation development processes in MNC subsidiaries.

Place, publisher, year, edition, pages
UK: Emerald Group Publishing Limited, 2011. 139-166 p.
Series
Progress in International Business Research, ISSN 1745-8862 ; Volume 6
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:uu:diva-197513DOI: 10.1108/S1745-8862(2011)0000006010OAI: oai:DiVA.org:uu-197513DiVA: diva2:613167
Available from: 2013-03-26 Created: 2013-03-26 Last updated: 2013-11-22Bibliographically approved
In thesis
1. The Advantage Paradox: Managing Innovation Processes in the Multinational Corporation
Open this publication in new window or tab >>The Advantage Paradox: Managing Innovation Processes in the Multinational Corporation
2013 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Two important ways that a subsidiary can contribute to the multinational corporation’s (MNC) competitive advantage are innovation development and transfer activities. However ‘the advantage paradox of the MNC’ calls into question a subsidiary’s ability to effectively and efficiently carry out both innovation development and transfer activities. This thesis investigates the validity of existence of ‘the advantage paradox of the MNC’ and explores possible solutions for overcoming it. This is done by conducting research around four questions: 1) In what circumstance can a subsidiary develop novel innovations? 2) In what circumstance can an innovation add value to an innovation developing subsidiary and what kind of value can the innovation add? 3) What are the factors that hinder innovation transfer and what kind of mechanisms are needed to overcome these hindrances? 4) Does innovation developed internally at an MNC transfer better within the MNC, compared to innovation developed externally to an MNC?

The outcome of this thesis shows that the subsidiary faces a dilemma when managing innovation activities which is connected to ‘the advantage paradox of the MNC.’ The dilemma comes from tradeoffs that exist due to the subsidiary’s duties within the MNC and its involvement with external business counterparts. The studies in this thesis confirm that the subsidiary’s business contexts leads to novel innovations but innovation developed with external business partners are more difficult to exploit on a more general basis within the MNC. Although there are solutions to overcome the ‘advantage paradox of the MNC,’ by remedying transfer barriers, the solutions are complex processes and in many cases subsidiaries face predicament of having to choose one benefit over another.

Place, publisher, year, edition, pages
Uppsala: Uppsala University, Department of Business Studies, 2013. 108 p.
Series
Doctoral thesis / Företagsekonomiska institutionen, Uppsala universitet, ISSN 1103-8454 ; 159
Keyword
Multinational corporation, Subsidiary, ‘Advantage paradox of the MNC’, Innovation development, Innovation transfer
National Category
Business Administration
Research subject
Business Studies
Identifiers
urn:nbn:se:uu:diva-196629 (URN)978-91-506-2338-3 (ISBN)
Public defence
2013-04-26, Hörsal 2, Ekonomikum, Kyrkogårdsgatan 10, Uppsala, 13:15 (English)
Opponent
Supervisors
Available from: 2013-04-05 Created: 2013-03-11 Last updated: 2013-04-23Bibliographically approved

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Holmström Lind, ChristineKang, Olivia

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