The multi-lens approach to understanding subsidiary contributory role development : a thesis presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Management at Massey University, Albany, New Zealand

Abstract

The contributory role of a foreign subsidiary refers to the intra-firm international responsibilities, through which the subsidiary contributes its firm-specific advantages to the multinational enterprise (MNE). This thesis examines development of subsidiary contributory role in terms of role expansion and role renewal. This research area has not been adequately explored in depth in prior research. The thesis addresses this research gap by grounding empirical research in multiple theories, the insights of which have not been sufficiently used to study (but are important to understand) this research area. These theories are the attention-based, global production network, institutional, resource-based, and resource dependence theories. Guided by these theories and based on the empirical data from nine case studies of foreign-owned subsidiaries in New Zealand, the thesis has developed two theoretical frameworks, named as the ‘subsidiary role expansion’ and ‘subsidiary role renewal’ frameworks respectively. The subsidiary role expansion framework suggests that subsidiary role expansion, which can occur at five levels, is affected by a combination of four factors which are identified as: (i) the parent’s positive attention; (ii) internal and external (local/global) linkages/embeddedness of the subsidiary; (iii) institutional forces in local, internal and/or transnational settings; and, (iv) deployment of superior resources by the subsidiary. The subsidiary role renewal framework provides insights into the subsidiary’s renewal/ reacquisition of endangered and reallocated international responsibilities. This framework argues that endangerment and/or reallocation of a subsidiary’s international responsibilities results from the combined or individual effects of several factors. These factors include: (i) the parent’s negative attention; (ii) the parent’s limited attentional capacity; (iii) the MNE’s internal restructuring; and, (iv) subsidiary-level superior resources lacking the parent’s recognition, lacking a mobility barrier, or failing to create the MNE’s dependence. The framework analyses patterns of combined and individual effects of the parent’s positive attention and the subsidiary’s deployment of superior resources on the subsidiary’s renewal or reacquisition of endangered and reallocated international responsibilities. These two frameworks contribute to the subsidiary development literature by providing new insights into the development of subsidiary contributory roles. These frameworks have practical implications for subsidiary managers, corporate executives, and public policy makers.