Unfolding Evolutionary Growth Within a Subsidiary: The Case of a Sales Subsidiary in the Middle East
Year: 2015
Type: dissertation
Abstract: Subsidiaries are important entities in multinational corporations and are typically established\nwith predetermined business responsibilities. A subsidiary responds to actors in the internal\nnetwork (e.g., HQs and other subsidiaries) as well as actors in the external network (e.g.,\ncustomers) within the local environment. Over time, subsidiaries take on new business\nresponsibilities as a result of their own agendas.\nActivities conducted to fulfill business responsibilities are part of a subsidiary’s internal\nprocesses. These internal processes are dependent on resources that are bundled into\ncapabilities, which are thereafter leveraged toward actors. How these internal processes\ndevelop as a subsidiary evolutionarily grows through the creation and development of capabilities over time has received limited research attention. Therefore, the purpose of the\nstudy is to increase our understanding of how the internal processes of an evolutionarily\ngrowing subsidiary unfold. The evolutionary growth of a subsidiary requires continuous\nresource management to enable the creation and development of capabilities. Capabilities refer\nto a set of complex patterned activities that, through the act of carrying out these activities,\nallow for enhanced value to be developed. Thus, the study investigates how resources are\nmanaged and how capabilities are created and developed as a subsidiary evolutionarily grows.\nIn order to pursue a study that unfolds the internal processes of an evolutionarily growing\nsubsidiary, a punctuated longitudinal case study was conducted at a sales subsidiary in the\nMiddle East. Interviews were conducted at HQs, at the subsidiary, and with distributors and\ncustomers, which constituted various elements of the subsidiary’s external and internal\nnetwork.\nThe findings from this study reveal how an evolutionarily growing subsidiary develops\nmanagerial and operational capabilities that, when combined, establish a proactive approach to\nthe subsidiary’s business responsibilities. The proactive approach functions as a\ncountermeasure to the influence of external and internal actors on the subsidiary’s business\nresponsibilities. Furthermore, the development of a proactive approach determines how\nactivities undertaken in the subsidiary result in the means to address uncertainty rather than\nmerely being aware of uncertainty.\nThe contributions to the subsidiary evolutionary literature include how and what capabilities\nare formed (managerial and operational). The creation and development of capabilities also\ncontribute to how a subsidiary’s influence in and interdependence on the internal and external\nnetworks increases. Finally, this study contributes to the subsidiary evolutionary literature and the resource management literature through the creation of a model that portrays how a subsidiary as a business unit evolutionarily grows by emphasizing its internal processes, which are constituted by the interdependent structuring, bundling, and leveraging of managerial and operational capabilities.
Author: Johan Jakobsson
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W14293784