Functional Responsibilities of Subsidiaries: Theoretical Perspective



The chapter discusses theoretical background for the phenomenon of subsidiaries’ functional specialization. The first two sections present basic assumptions of internalization theory and business network theory, discuss how they perceive the role of subsidiaries within the multinational enterprise, and explain the existence of subsidiary specialization in activity sets within the multinational enterprise’s value network. The last section of the chapter concentrates on the phenomenon of competing for functional responsibilities within the multinational enterprise. It focuses on reasons for this competition, and presents its various forms and consequences from the perspective of HQs and subsidiaries. The arguments presented in this chapter, together with the real-life examples of ongoing functional changes occurring at a subsidiary level, highlight that the subsidiaries’ functional responsibilities are becoming an increasingly important issue.


Functional responsibilities Internalization theory Business network theory Functional specialization Internal competition MNE 


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© The Author(s) 2019

Authors and Affiliations

  1. 1.Department of International CompetitivenessPoznań University of Economics and BusinessPoznańPoland

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