Dual Paths to Performance: The Impact of Global Pressures on MNC Subsidiary Conduct and Performance

49 Pages Posted: 11 Jan 2005

See all articles by Sunil Venaik

Sunil Venaik

University of Queensland - Business School

David Midgley

INSEAD - Marketing

Timothy M. Devinney

University of Manchester - Alliance Manchester Business School

Date Written: January 2005

Abstract

Over the last decade, the international business literature has placed ever-greater emphasis on the role that learning and innovation play in determining multinational and multinational subsidiary performance. The present research seeks to understand the organizational paths leading to such desirable outcomes as greater learning, increased innovation, and improved performance. Using a model tested with data collected through a survey of managers in subsidiaries of multinational firms, we find dual, independent paths to improved performance-one through networking and inter-unit learning and the second through subsidiary autonomy and innovation. A particular feature of these findings is that they can be shown to be robust after controlling for a wide range of environmental pressures and firm and industry factors. However, in the absence of environmental controls the dual path finding is rejected. These conflicting findings support the imperative to test models that include a diverse range of environmental pressures so that the true effects of organizational factors on learning, innovation, and performance can be identified.

Keywords: Multinational corporations, innovation, subsidiaries, performance

JEL Classification: F23

Suggested Citation

Venaik, Sunil and Midgley, David and Devinney, Timothy M., Dual Paths to Performance: The Impact of Global Pressures on MNC Subsidiary Conduct and Performance (January 2005). Available at SSRN: https://ssrn.com/abstract=646401 or http://dx.doi.org/10.2139/ssrn.646401

Sunil Venaik

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

David Midgley (Contact Author)

INSEAD - Marketing ( email )

Boulevard de Constance
Fontainebleau, 77305
France
+33 1 60 71 26 38 (Phone)
+33 1 60 74 55 00 (Fax)

Timothy M. Devinney

University of Manchester - Alliance Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

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