The public defense of Edward Gillmore’s doctoral thesis in Industrial Economics and Organisations

Doctoral thesis and Licentiate seminars

Datum: 2017-11-05 - 2017-11-15
Tid: 13.00 - 16.00
Plats: Room Omega. MDH, Västerås

The public defense of Edward Gillmore’s doctoral thesis in Industrial Economics and Organisations will take place at Mälardalen University November 15.

The title of the thesis is “Four essays on subsidiary evolution: Exploring the antecedents, contexts and outcomes of mandate loss”.

The faculty examiner is Professor Pamela Sharkey Scott, National University of Ireland Maynooth; and the examining committee consists of Professor Ulf Holm, Uppsala University; Professor Randi Lunnan, BI Norwegian Business School; Professor Jan-Erik Vahlne, University of Gothenburg.

Reserve: Claes Eriksson, professor, MDH

The doctoral thesis has serial number 239

 

Summary

There has been an increasing in interest in studying the evolution of foreign subsidiaries of the Multinational Enterprises in the past 30 year. This was born out of the strategy and structure stream which focused on the roles, responsibilities and activities of subsidiaries, captured under the umbrella of subsidiary charters and mandates. The emergence of enhancement or depletion of subsidiary charters is driven by two different types of organizational units and the environment. (1) The parent is ultimately responsible for the establishment of subsidiaries and will greatly impact its evolution by involvement. (2) Evolution is also largely contingent on the subsidiary’s choice. (3) The environment is critical in the evolutionary process as changes in the environment will influence the parent and subsidiary in their choices (Birkinshaw, 1996; Birkinshaw and Hood, 1998; Cantwell and Mudambi, 2005). The thesis sets out to investigate the drivers and effects of mandating on subsidiary evolution within the MNE. The departure in this thesis from the literature is its specific focus on how mandates are lost in complex networked Multinational Enterprise’s and the effect this has on subsidiary resources and relationship profiles.

This thesis bases its empirical analysis on data collected from two qualitative rounds of interviews collected from two Swedish multinational enterprises, Alfa and Beta, and 36 of their foreign subsidiaries based in Europe, China, India and N. America. This yielded 112 interviews, the first round of interviews investigates the headquarters drivers of mandating and the network characteristics of mandated subsidiaries. It became apparent during this first round that mandates were lost by subsidiaries quite often and that they continued operating. These counterfactuals informed the second round of interviews, here the focus zooms in on the consequences of the loss of R&D mandates on subsidiary evolution. Specifically, the thesis examines the resource portfolios and relationship characteristics of the focal subsidiaries and the impact of mandate loss to elucidate the subsidiaries responses to mandate loss. The study builds on four essays examining the implications of R&D mandating throughout the MNEs network on the subsidiary’s evolution.

Taken together, this thesis through case-studies elucidates that the process of mandating presents subsidiaries, that are not wound-down, spun-off or closed, with the opportunity and space to evolve its charter. This has far-reaching possible consequences for both the subsidiary and the MNE not least in resource and relationship orchestration and managing innovative performance. Secondly, the thesis calls into question the importance of mandates and that researchers should pay more attention to the formal and informal tenets of mandates (e.g. what the mandate gives the subsidiary). The mandate is a well established indicator of the subsidiaries formal role and activities however it is not indicative of the informal behavior of a subsidiary which in this thesis is shown to be important in equal parts for the subsidiary’s evolution.