Pull the Right Levers: Creating Internationally ‘Useful' Subsidiary Competence by Organizational Architecture
Journal
Long Range Planning
ISSN
0024-6301
ISSN-Digital
1873-1872
Type
journal article
Date Issued
2014-02
Author(s)
Abstract
We study the effect of formal organizational architecture on the extent to which a focal subsidiary creates competence that is "useful" to other units of a multinational corporation (MNC). Elements of formal organizational architecture represent levers by which parent firm and subsidiary managers can realize their intentions. Building on motivation theory, we argue that an appropriate organizational architecture stimulates a subsidiary's motivation to create internationally "useful" competence so that its extent of competence creation will increase. We develop and empirically test hypotheses for three specific organizational elements, viz.: a home-base augmenting mission, interfaces with other MNC units, and the subsidiary's strategic and operational autonomy. Unique survey data from 287 subsidiaries provide intimate insights into the internal structure of MNCs and strongly support our account. We close by discussing the implications of our study for the academic literature, management practice, and future research.
Language
English
Keywords
Competence Creation
Organizational Architecture
Strategic Autonomy
Operational Autonomy
Multinational Corporation
Subsidiary
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Elsevier
Publisher place
Amsterdam
Volume
47
Number
1-2
Start page
32
End page
48
Pages
17
Subject(s)
Division(s)
Eprints ID
231478
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Name
Palmie et al. 2014 LRP.pdf
Size
352.23 KB
Format
Adobe PDF
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