This paper examines several characteristics of foreign subsidiaries with low autonomy. Data derived from a survey of 381 MNC subsidiaries located in Denmark, Germany and the UK demonstrate that low-autonomy subsidiaries are highly embedded in their respective MNC networks and that they establish a high number of intra-organizational relationships. Furthermore, such subsidiaries are typically managed by nationals of the MNC’s headquarters home country. Despite the fact that such subsidiaries have low autonomy, they employ a high proportion of professional staff members. We find a negative relationship between lower autonomy and the production activities carried out by the subsidiary. In fact, low-autonomy subsidiaries appear to be specialized in that they focus on a few value-chain activities and they typically serve as marketing outlets.
|Journal||Journal of International Business and Economy|
|Publication status||Published - 2012|
Gammelgaard, J., McDonald, F., Stephan, A., Tüselmann, H., & Dörrenbächer, C. (2012). Characteristics of Law-Autonomy Foreign Subsidiaries: Value Chains. Staffing, and Intra-Organizational Relationships. Journal of International Business and Economy, 13(1), 65-95. http://www.i-jibe.org/achive/2012spring/1-Gammelgaard,%20McDonald,%20Stephan,%20T_elmann,%20and%20D_renb_her%20(2012).pdf