JIBS Working Papers,
Jönköping International Business School

Abstract: Using network approaches to subsidiary theory, this paper investigates the impact on performance of interactions between the factors of autonomy, intra and inter-organizational network relationships. The paper analyzes both direct and indirect interactions between these factors. This study develops and extends existing research that use network based approaches to the study of subsidiary performance by considering the role of autonomy as well as network relationships. In addition the study examines changes in the interactions between the main factors rather than the levels of these factors. Examination of the interactions between changes in autonomy and networks and the subsequent impact on performance provides a framework for obtaining evidence on how these interactions affect changes in performance and thereby contributes towards a better understanding of the evolution of subsidiaries. The results of the data analysis, gathered from a survey of 350 foreign owned subsidiaries in the UK, Germany and Denmark, reveals evidence of the complex interactions between increases in autonomy and in network relationships and the subsequent impact on performance. The results also highlight the central role of interorganizational network relationships in the interaction between the factors that produce significant and positive effects.

Keywords: Subsidiaries; Subsidiary Evolution; Multinational Companies; Autonomy; Network Relationships; Performance; Partial Least Squares

26 pages, April 23, 2012

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