Strategies to Overcome Resource Dependencies in Challenging Business Environments: Evidence from MNC Subsidiaries in East Africa

This paper aims to explore the resource access strategies adopted by subsidiaries operating in challenging business environments. Based on detailed case studies of ten subsidiaries in East Africa, we find that financial constraints and limited availability of local resources make subsidiaries highly reliant on external resources to survive. We identify a two-pronged subsidiary response to these resource dependencies, where subsidiaries on the one hand integrate strongly with parents’ governance and accounting systems, while at the same time, integrate into local environments when it comes to marketing, sales and resource seeking activities. We find that characteristics of the manager – especially his/her’s level of industry experience – are crucial for subsidiaries’ ability to handle the conflicting forces of drawing on parent resources while accessing local networks.