Authors: Scott, Pamela Sharkey; Gibbons, Patrick T.

Source: Strategy and Leadership, Volume 37, Number 4, 2009 , pp. 43-47(5)

Publisher: Emerald Group Publishing Limited

Abstract:

<B>Purpose</B> - <IT>This paper aims to enhance the understanding of how subsidiary CEOs can move their unit's activities up the value chain and reduce the risk of subsidiary closure and relocation of its activities.</IT> <B>Design/methodology/approach</B> - <IT>The entire population of over 1,100 subsidiaries of multinational corporations (MNCs) located in Ireland were sampled for this study, representing a diversified pool in terms of foreign ownership. Respondents were largely subsidiary CEOs. In addition, 24 subsidiary CEOs/directors from a cross section of eight subsidiaries were interviewed.</IT> <B>Findings</B> - <IT>CEOs/directors are taking active steps to enhance their subsidiary's role within the MNC and to move their activities up the value chain. These include positioning to extend subsidiary autonomy, building information networks, creating a climate for entrepreneurship and promoting strategy development processes.</IT> <B>Research limitations/implications</B> - <IT>Results from the survey are subject to the standard limitations and a larger pool of interviewees may have strengthened the findings.</IT> <B>Practical implications</B> - <IT>Little practical guidance is available to subsidiary CEOs on how they can reduce their subsidiary's relocation risk. This paper addresses this gap and provides a stimulus to CEOs to be proactive in managing their subsidiary's ability to recognize and exploit opportunities to enhance subsidiary contribution and position within their MNC.</IT> <B>Originality/value</B> - <IT>While other papers have focused on how subsidiaries can generate initiatives or promote entrepreneurship, the unique contribution of this paper is the identification of strategies CEOs can adopt to enhance their subsidiary's ability to respond to opportunities and position for survival and growth within their MNC.</IT>

Keywords: Corporate strategy; Information systems; Innovation; Ireland; Multinational companies; Subsidiaries

Document Type: Research article

DOI: http://dx.doi.org/10.1108/10878570910971638

Publication date: 2009-07-03

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• Previously published as The Antidote

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