, Volume 10, Issue 3, pp 589-605
Date: 25 Nov 2012

Subsidiary initiatives and subsidiary autonomy: Evidence from New Zealand and Brazil

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Abstract

The paper uses evidence from a developed and a developing economy (New Zealand and Brazil) to study the consequence of multinational subsidiary initiative taking for subsidiary autonomy. Initiative taking and autonomy are known to increase the likelihood of a subsidiary continuing to grow and develop. Uncertainty remains as to whether subsidiaries acquire or lose autonomy as they engage in initiatives partly as the willingness to pursue initiatives can be viewed positively or negatively by the parent company. By using cross-country data and distinguishing three types of initiative according to the scope of their potential impact (internal, local and global) the study provides a basis for examining this topic that improves on evidence from a single country or single initiative study. Data from 200 multinational subsidiaries in New Zealand and 172 in Brazil are gathered for analysis. As well as examining the overall relationship between initiative taking and autonomy the study presents the first evidence on this topic for subsidiaries in New Zealand and Brazil. The overall conclusion is that subsidiary initiative taking is likely to increase subsidiary autonomy but the affect over autonomy is dependent upon the type of initiative that the subsidiary undertakes: subsidiary autonomy is more likely to increase as a result of a local market initiative than a global or internal market initiative.