Journal of International Business Studies

, Volume 44, Issue 8, pp 787–812 | Cite as

MNC subsidiary channel relationships as extended links: Implications of global strategies

  • Mahima Hada
  • Rajdeep Grewal
  • Murali Chandrashekaran
Article
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Revised:
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Abstract

Foreign subsidiaries of multinational corporations (MNCs) rely on external partners, such as channel partners, to achieve global objectives. We conceptualize the subsidiary’s channel partner as an extended link of the MNC’s internal network: thus, the subsidiary’s adaptation and execution of the MNC’s global strategies should influence the subsidiary’s channel relationship and performance. Building on the strategy–environment alignment framework, we study the influence of MNC global strategies (global efficiency, multinational flexibility, and worldwide learning) on a subsidiary’s channel commitment and the moderating influence of the host-country environment. Survey data from German and Japanese MNCs in the United States indicate the importance of global strategies to a channel relationship. For example, we find that an emphasis on multinational flexibility is detrimental, but worldwide learning benefits the subsidiary’s channel commitment. We also find that the host-country environment plays a contingent role: for example, a global efficiency strategy is beneficial for channel commitment in a stable environment, but detrimental in a dynamic environment. Our research offers key implications for MNCs; we suggest that when MNCs decide to lay emphases on global strategies the MNCs should consider not just their internal subsidiary network, but also their extended channel partner links that function in foreign markets.

Keywords

subsidiary relations global strategy distribution channels research methods econometrics organization theory 
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Notes

Acknowledgements

The authors acknowledge feedback from David Griffith, Alok Kumar, Gary L. Lilien, Lilach Nachum, Paul Patterson, and Qiong Wang.

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Copyright information

© Academy of International Business 2013

Authors and Affiliations

  • Mahima Hada
    • 1
  • Rajdeep Grewal
    • 2
  • Murali Chandrashekaran
    • 3
  1. 1.Aaronson Marketing and International Business DepartmentZicklin School of Business, Baruch College, City University of New YorkNew YorkUSA
  2. 2.Smeal College of Business, The Pennsylvania State UniversityUniversity ParkUSA
  3. 3.Sauder School of Business, University of British ColumbiaVancouverCanada

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