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Aggressive acquirers, laidback owners? Organisational dynamics of subsidiary integration in Chinese MNCs

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Abstract

Why do Chinese MNCs appear to be ‘aggressive’ in cross-border acquisition (Zeng and Williamson, 2003), yet ‘laidback’ (Liu and Woywode, 2013) in consolidating subsidiaries in developed economies? This paper addresses this question by examining the power dynamics underpinning subsidiary integration and by bridging two relatively disconnected streams of literature in international business: subsidiary integration of emerging-market MNCs in advanced economies, and power relations inside MNCs. An exploratory case study is outlined to examine a Chinese MNC’s attempt to consolidate a newly acquired Canadian subsidiary. The findings suggest that developing process-based power is critical to subsidiary integration for Chinese MNCs.

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Authors and Affiliations

  1. School of Management, Royal Holloway, University of London, Egham Hill, Egham, Surrey, TW200EX, UK

    Yu Zheng

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  1. Yu Zheng
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Correspondence to Yu Zheng.

Appendix: Interview Schedule

Appendix: Interview Schedule

Section A: Internationalisation strategy

  1. 1.

    What is the history of the parent firm?

  2. 2.

    What is the corporate business strategy of the parent firm?

  3. 3.

    What is the parent firm’s competitive position in the Chinese market?

  4. 4.

    What are the parent firm’s experiences of domestic M&A in China?

  5. 5.

    What is the corporate strategy towards internationalisation?

  6. 6.

    What did the parent firm intend to achieve through internationalisation?

  7. 7.

    To what extent has the Chinese government’s ‘go global’ policy influenced the internationalisation of the parent firm?

  8. 8.

    What were the reasons for acquiring this particular firm?

  9. 9.

    How did the company manage the take-over/acquisition?

  10. 10.

    Overall, has the company achieved the strategic target through this acquisition?

Section B: Subsidiary consolidation

  1. 1.

    When did the parent firm start to consolidate the subsidiary?

  2. 2.

    What did the parent firm want to achieve through subsidiary consolidation?

  3. 3.

    What are the milestones in consolidating the subsidiary?

  4. 4.

    How did the parent firm being from a developing country affect the consolidation?

  5. 5.

    How did the structure of the subsidiary change?

  6. 6.

    How did the management team of the subsidiary change?

  7. 7.

    Who, if any, was opposing subsidiary consolidation?

  8. 8.

    How was such opposition handled at the subsidiary (or by the parent firm)?

  9. 9.

    Overall, how do you evaluate the process of subsidiary consolidation?

  10. 10.

    Overall, what organisational achievements can be associated with subsidiary consolidation?

Section C: Power dynamics

  1. 1.

    Were you involved in making decisions with regard to restructuring?

  2. 2.

    Where are the decisions made?

  3. 3.

    How does the parent firm influence these decisions?

  4. 4.

    How did you influence these decisions?

  5. 5.

    If you were not involved, do you still have influence over these decisions? Why or why not?

  6. 6.

    What changes were introduced over the course of restructuring?

  7. 7.

    How were these changes introduced?

  8. 8.

    What changes were rejected by the subsidiary or withdrawn by the parent firm over the course of restructuring?

  9. 9.

    Why and how were these changes rejected/withdrawn?

  10. 10.

    What adjustments were made over the course of restructuring?

  11. 11.

    Overall, how would you evaluate the management of this subsidiary?

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Zheng, Y. Aggressive acquirers, laidback owners? Organisational dynamics of subsidiary integration in Chinese MNCs. Asian Bus Manage 15, 317–342 (2016). https://doi.org/10.1057/s41291-016-0004-0

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