Configurations of Strategy and Structure in Subsidiaries of Multinational Corporations

Abstract

A three-fold typology of subsidiary roles (world mandate, specialized contributor, local implementer) was induced from the literature and its empirical validity was confirmed. Adopting a configurational approach, we then explored the ways in which subsidiary ‘structural context’ varies across subsidiary role types. Structural context characteristics were determined through a discussion of the underlying principles of the ‘hierarchy’ and ‘heterarchy’ models of multinational organization. The key findings were: (a) higher strategic autonomy in world mandates than in local implementers; (b) a more internationally configured value-chain in world mandates and specialized contributors than local implementers; (c) lower levels of internal product flows in world mandates than the other two types; and (d) a significantly lower performance in specialized contributors. Implications for a configurational model of subsidiary management, and for heterarchy as a higher level conceptualization, are discussed.