Subsidiary Types, Activities, and Location: An Empirical Investigation

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effect, what this process literature indicated is the evolution of subsidiary roles (as an outcome ofthe MNC’s international evolution) (Malnight, 1995, 1996). As with the strategy perspective, theprocess perspective also implied that subsidiary roles are developed as an outcome of theevolution of the MNC’s international operations, once again leading to second-order effects forsubsidiary roles.A number of empirical studies have tried to verify these typologies. Much of the work that hasbeen done has used a top-down approach, motivated by theory, to identifying subsidiary roles.The typical empirical study would attempt to validate a particular typology or a general typologyinduced from literature or a typology generated along some important strategic and organizationaldimensions. Harzing (2000), Leong and Tan (1993) attempt to verify the Bartlett and Ghoshal(1986) typology. Roth and Morrison (1990) explored the Prahalad and Doz (1987) framework toidentify subsidiaries either focusing on global integration, local responsiveness, or pursuing amultifocal existence. Others such as Birkinshaw and Morrison (1995) induce typologies fromliterature. Further, researchers have offered subsidiary typologies based on different dimensionsconsidered to be relevant in discriminating subsidiaries. These dimensions have ranged fromgeographic and product scope of the subsidiary mandate (White & Poynter, 1984), subsidiary’sposition in the integration-responsiveness framework (Jarillo & Martinez, 1990; Roth &Morrison, 1990; Taggart, 1998), subsidiary’s position with respect to resource flows (Randoy &Li, 1998), subsidiary autonomy and decision making (Taggart, 1997), or inflows and outflows ofknowledge at the subsidiary level (Gupta & Govindarajan, 1991) (see Paterson & Brock, 2002 fora review, and Table 1 for a summary).TABLE 1 GOES ABOUT HERE5
THE DETERMINANTS OF SUBSIDIARY TYPES: RESEARCH GAPS ANDRESEARCH QUESTIONSWhile our understanding of national subsidiaries has greatly improved from the early strategy andprocess origins, there are a number of gaps to be addressed. The traditional approach, as we haveseen, has been to induce one from the literature (Birkinshaw & Morrison, 1995 for instance).Using the strategy typologies developed in a theoretical manner raises particular issues. Enrightand Subramanian (2007) have argued that such a traditional approach to typology development,one that is based on theory is characterized by a number of challenges. The traditional approach isto assume a monothetic perspective, whereby it is assumed that all the firms in the populationpossess all the attributes in some systematic manner, and the dimensions along which subsidiariesvary (scope variables, for instance) are mutually exclusive. However, such sweeping assumptionsare rarely made explicit and their implications examined.There is also a need for empirical work that addresses a wider range of host countries and homecountries that try to elucidate why subsidiaries have particular roles in particular locations. Whilethe several studies have added to the stock of empirical knowledge, some have questionedwhether sufficient research is available to make empirical claims (Ghoshal, 1997; Heldlund &Ridderstale, 1997). Much of the literature has seen studies undertaken on a limited sample space.Jarillo and Martinez (1990), Taggart (1997), (1998) and White and Poynter (1984) focus onsubsidiaries based in a single country. The tendency is also to focus on subsidiaries of parentcompanies from a single country or a small number of countries (as identified by Paterson &Brock, 2002).A significant amount of the work on subsidiary types has used cases or data from relatively smallor peripheral economies (inter alia Canada, Sweden, Spain and Scotland), which may not reflectthe entire range of subsidiary type alternatives. Case studies, while being useful starting points for6
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Page 20 and 21: METHODS AND RESULTSThe results repo
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Page 30 and 31: ReferencesAgarwal, S., & Ramaswami,
Page 32 and 33: Enright, M. J. 2005a. Regional mana
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Page 38 and 39: Table 1. Empirical Studies of Subsi
Page 40 and 41: Table 2. Cluster StatisticsVariable

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