Subsidiary And Firm Specific Advantage Essay

3255 words - 14 pages

 

 

 

 

Subsidiaries’
 role
 and
 contribution
 in
 the
 creation
 of
 
new
 firm-­‐specific
 advantages
 (FSAs)
 
Carlotta
 Assetta
 –
 Student
 Number:
 11112980
 

ABSTRACT
 
This
  paper
  attempts
  to
  more
  precisely
  delineate
  the
  MNEs
  subsidiaries’
  role
  and
  contribution
  to
 
new
  firm-­‐specific
  advantages
  development.
  I
  present
  a
  new
  framework,
  which
  ranks
  foreign
 
subsidiaries
 contribution
 to
 FSAs
 creation
 according
 to
 two
 criteria:
 Subsidiary’s
...view middle of the document...

  I
  used
  the
  concepts
 
and
 the
 theoretical
 approaches
 related
 to
 the
 first
 theme
 in
 order
 to
 investigate
 the
 change
 in
 the
 roles
 and
 
functions
 of
 the
 MNEs’
 subsidiaries,
 trying
 to
 understand
 the
 contribution
 that
 these
 actors
 can
 offer
 to
 the
 
success
  of
  the
  parent
  firms
  operating
  in
  international
  contexts.
  For
  this
  purpose
  I
  have
  examined
  the
 
theoretical
 contributions
 of
 Hymer
 (1976),
 Dunning
 (1980,
 1988)
 and
 the
 Internalization
 theory
 economists
 
(Buckley
  &
  Casson
  1976;
  Rugman
  1981),
  who
  aim
  their
  studies
  on
  the
  parent
  MNE
  as
  a
  strategic
  and
 
relevant
  unit
  of
  analysis,
  comparing
  them
  with
  the
  latest
  contributions
  of
  Birkinshaw
  (1996,
  1997,
  1998)
 
and
  Peng
  (2001),
  who
  shift
  the
  focus
  to
  the
  subsidiaries
  and
  their
  potential
  FSAs’
  development.
  I
  also
 
introduced
  the
  concept
  of
  Country
  specific-­‐advantages
  (Rugman
  &
  Verbeke,
  1992),
  which
  will
  be
  used
  in
 
one
 of
 the
 main
 assumptions
 of
 my
 model.
 
As
 regard
 the
 theoretical
 concepts
 related
 to
 the
 second
 theme,
 I
 decided
 to
 focus
 on
 the
 model
 of
 Sethi
 &
 
Judge
 (2009)
 introducing
 the
  notions
 of
 Liability
 of
 Foreignness
 (LOF),
 Asset
 of
 Foreignness
 (AOF)
 and
 Asset
 
of
  Multinationality
  (AOM),
  and
  in
  addition
  on
  the
  subsidiaries’
  degree
  of
  adaptation
  to
  the
  unique
  host
 
environment.
  Further,
  exploiting
  this
  integrated
  conceptual
  framework,
  I
  advanced
  four
  theoretical
 
propositions
  on
  how
  the
  subsidiaries’
  embeddedness
  in
  the
  host-­‐country
  environment,
  and
  their
 
knowledge
  and
  capabilities,
  lead
  to
  new
  FSAs
  generation.
  To
  better
  explain
  these
  theoretical
 
argumentations,
  I
  used
  the
  product-­‐level
  Boston
  Consulting
  Group
  Matrix
  (Henderson,
  1979)
  and
  I’ve
 
applied
  it
  at
  the
  organizational
  level.
  This
  framework
  aims
  to
  contribute
  new
  insights
  to
  Prahalad
  &
  Doz
 
(1987)
  model,
  and
  that
  of
 ...

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