Fighting for Power: The Strategy of Global Mncs' Subsidiaries

Abstract

The purpose of this paper is to examine the relational configurations of a subsidiary that belongs to a global industry such as auto components manufacture. As global integration pressures are high in this environment, there are pressures for centralization and some subsidiaries are losing resources and capabilities to the benefit of headquarters or other subsidiaries. Consequently, they may fight within the MNC to retain control over certain resources and capabilities, mainly by building strong relationships with local suppliers, providers, customers or other units of the MNC that may reach global relevance. While previous studies have identified the significance of networks as a metaphor for understanding MNC structure, in this paper we attempt to show how analysis of a subsidiary's networks of contacts can be a useful tool to identify the role the subsidiary is playing in the multinational as a whole. It shows how networks can be used by the subsidiary as a tool to proactively develop a formulated strategy.

Keywords: subsidiary, relationship network, resource configuration, multinational corporations, auto components