The role of embeddedness and top management teams on subsidiary initiative process

Resumen

The role of TMT on subsidiary initiatives is crucial, therefore, understanding what is the best Subsidiary TMT composition that allows the subsidiary to develop the optimum balance between external and internal embeddedness, and thus foster subsidiary initiatives, is one of the primary results of this thesis. Foreign subsidiaries contribute to the creation of competitive advantages in the multinational corporation (MNC) (Birkinshaw, 1997). Subsidiary initiative, which is considered to be a key element in that process, has been studied from several theoretical frameworks. The network and embeddedness perspective has mainly focused on how the environment can influence entrepreneurial behavior (Schmid et al., 2013). Several authors particularly study the role of external embeddedness as an antecedent of subsidiary initiative, since subsidiaries with closer relationships to suppliers and customers can access resources and information, are able to assimilate easier new knowledge from outside, and develop competencies (Andersson et al., 2001; Ciabuschi et al., 2011; Yamin & Andersson, 2011), and therefore subsidiaries’ initiatives are likely to emerge. Recent studies have pointed out that because subsidiaries belong to a MNC we cannot ignore that internal embeddedness plays a crucial role on explaining why some of them are able to gain HQ attention and support to their initiatives while others don’t (Figueiredo, 2011; Meyer et al., 2011). The relationship between external and internal embeddedness is so far inconclusive (Achcaoucaou et al., 2013; Scott-Kennel & Giroud, 2014; Yamin & Andersson, 2011). Additionally, there is a call in the IB literature to study SI as a “multilevel phenomena by including individuals, teams, the organization and the external network in which it is embedded, which have been neglected so far” (Strutzenberger and Ambos, 2013, 2). Therefore, in this thesis I attempt to understand what the characteristics of an entrepreneurial TMT are, and what particular composition of the STMT could be more appropriate to succeed at discovering opportunities and gaining HQ support, hence succeeding at implementing Subsidiary Initiatives. The methodology is qualitative, based on multiple case studies and following the Gioia method. Semi structured interviews will be conducted with several actors of each MNC in order to triangulate information, for example CEO of subsidiary, subsidiary TMT members, HQ CEO or TMT members. This methodology will allow me to understand a how different managerial phenomenon interact, some more studied than others, responding to several calls of opening the black box both of TMT diverse composition and SI process. I found a positive impact not only both types of embeddedness, but also an impact on both phases of SIP analyzed. STMT appears to be important, since the appropriate combination of members with their attributes and capabilities could lead to some subsidiaries more skillful at exploiting and selling initiatives. Then MNC should constitute a diverse STMT (age and functionality), which could become a subsidiary sustainable competitive advantage.