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Configurations of Strategy and Structure in Subsidiaries of Multinational Corporations

Abstract

A three-fold typology of subsidiary roles (world mandate, specialized contributor, local implementer) was induced from the literature and its empirical validity was confirmed. Adopting a configurational approach, we then explored the ways in which subsidiary ‘structural context’ varies across subsidiary role types. Structural context characteristics were determined through a discussion of the underlying principles of the ‘hierarchy’ and ‘heterarchy’ models of multinational organization. The key findings were: (a) higher strategic autonomy in world mandates than in local implementers; (b) a more internationally configured value-chain in world mandates and specialized contributors than local implementers; (c) lower levels of internal product flows in world mandates than the other two types; and (d) a significantly lower performance in specialized contributors. Implications for a configurational model of subsidiary management, and for heterarchy as a higher level conceptualization, are discussed.

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*Julian M. Birkinshaw is Assistant Professor of International Business at the Stockholm School of Economics, Stockholm, Sweden.

**Allen J. Morrison is Associate Professor at the American Graduate School of International Management (Thunderbird), Glendale, Arizona.

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Birkinshaw, J., Morrison, A. Configurations of Strategy and Structure in Subsidiaries of Multinational Corporations. J Int Bus Stud 26, 729–753 (1995). https://doi.org/10.1057/palgrave.jibs.8490818

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  • DOI: https://doi.org/10.1057/palgrave.jibs.8490818