| dc.description.abstract | Subsidiaries that act as channels for knowledge transfer and innovation within multinational enterprises (MNEs) play a central role in strengthening the organisation's competitive advantage. Despite the vast amount of International Business (IB) literature on subsidiaries, the phenomenon of subsidiary strategy remains theoretically fragmented and disjointed. This thesis addresses this theoretical fragmentation. Specifically, it weaves together the diverse concepts from the literature into a cohesive narrative that offers a holistic representation of subsidiary strategy. Initially, a conceptual model is developed from disparate literature strands that illustrates the dynamic and iterative process of subsidiary strategy from assumed role to elevated performance and enhanced prospects of survival.
The IB literature provides limited clarity on how to develop a subsidiary strategy, often embedding the concept within broader frameworks of subsidiary management. This creates a diffusion of understanding around subsidiary strategy development. This lack of clarity likely stems from the challenge of crafting a comprehensive theory that can accurately distinguish between meaningful subsidiary strategy and misconceptions. Despite the importance of subsidiary strategy, it remains an underexplored area. This is the motivation for this thesis. The principal research question is: "How is subsidiary strategy developed?" This dissertation is structured around three interconnected studies' theory development, conceptual modelling, and empirical findings' that collectively provide a holistic response to the overarching research question.
Study 1 investigates the intersection of subsidiary governance and strategy within the MNE. For many decades, strategy, structure, and governance (control) have been central themes in academic research. As MNEs transitioned from hierarchical to heterarchical structures and devolved responsibility for market and innovation knowledge to competence-creating subsidiaries, the parent-subsidiary governance dilemma came under increased scrutiny. The study aims to initiate a discourse on the underexplored and poorly conceptualised aspects of subsidiary governance, focusing on the locus of control, power dynamics, resource dependence, and the subsidiary's autonomy in strategic decision-making.
Study 2 is a conceptual study that seeks to reframe how IB scholarship addresses subsidiary strategy by providing a holistic examination of the activities, choices, and decisions that shape subsidiary strategy, particularly in the context of adopting a competence-creating role within the MNE. A process model is designed to illustrate the recursive and dynamic steps that subsidiary management may engage in to augment their mandate and optimise their survival prospects.
Study 3 aims to validate the conceptual model through an empirical case study of a set of subsidiaries in the Irish financial services sector. The findings suggest that a subsidiary�s ultimate goal of an enhanced mandate and survival is increased by following the identified dynamic process model of subsidiary strategy.
This thesis employs an abductive approach for explanatory theory that describes the subsidiary strategy process by both integrating disparate elements in the literature and then empirically explaining how the process evolves and manifests. It makes a number of contributions to the study of subsidiary strategy. First, it advances the debate around the nature of subsidiary strategy by redefining it as a holistic and integrated process, shaped by the subsidiary manager within the unique and idiosyncratic context of both the subsidiary and the MNE. Rather than treating subsidiary strategy as a set of fragmented elements�such as autonomy, influence, initiatives, and embeddedness�this study presents a consolidated perspective that reflects its interconnected, dynamic, and recursive nature. In doing so, it marks an important step toward a deeper understanding of how subsidiary strategies evolve over time and within complex organisational structures.
Second, the thesis reframes and synthesises a diverse and often disconnected body of literature, advancing theory by providing a comprehensive framework for future research. This framework allows IB scholars to engage in more cohesive discussions around subsidiary strategy development, particularly in the context of competence-creation.
Third, the study also brings attention to a critical, and often under-emphasised, strategic intent of subsidiaries, maximising their survival prospects within the MNE. In contexts shaped by headquarter (HQ) control and internal competition, survival emerges as a fundamental performance objective�often prioritised by subsidiary managers above conventional metrics such as profitability, return on assets, return on equity, or market share.
Fourth, the thesis provides practical value by offering subsidiary managers a guide to the integrated decisions they can adopt to shape their roles and influence within the MNE. It emphasises the agency of subsidiaries as strategic actors in their own right, capable of driving value creation and influencing the broader organisation�s competitive advantage.
Lastly, the research contributes methodologically by adopting a processual case study approach that incorporates interpretative sensemaking and contextualised explanation.
Despite its limitations, this thesis makes an important contribution to the IB subsidiary strategy literature by re-examining the area of subsidiary strategy and proposing a holistic approach that subsidiary managers can take to forge their own destiny within the idiosyncratic context of the subsidiary and the MNE. This represents another step in understanding the strategic dynamics and evolution of a subsidiary. | en |
