Globalization strategies for subsidiaries: The emergence of subsidiary specific advantages

This thesis studies how subsidiaries of U.S. multinationals earn international or global mandates. International mandates enable subsidiaries to go far beyond merely producing for a national market by giving them responsibilities for production, marketing and R&D activities in international markets. In the most advanced case, the subsidiary holds global responsibility for a product line--a global subsidiary mandate.; It is primarily at the level of the individual subsidiary, as it interacts with its parent multinational enterprise (MNE), that an international mandate is earned, or lost. This research investigates the subsidiary's interactions with its parent, and with the other firms in its parent's network. By studying how subsidiaries earn international mandates, this study adds a managerial and behavioural dimension to our understanding of international mandates.; The increased responsibilities that international mandates bring to successful subsidiaries are critical to the economic futures of the middle powers where foreign multinationals play a central role in the trade of the nation. Showing how subsidiaries have earned mandates makes a contribution to our theoretical understanding of the evolving role of non-home-country subsidiaries.; This thesis also develops the idea of second-order internationalisation, carried out by these subsidiaries as their parent companies pursue first-order internationalisation. And it introduces the notion of subsidiary-specific advantages, a concept which builds on the ideas of country- and firm-specific advantages to add another element to internalisation theory.; A multi-phased, multi-method research design was used to study the emerging phenomenon of international mandates. In Phase I the method used was in-depth, unstructured interviews. In Phase II, three methods were utilised: semi-structured personal interviews of key informants on both sides of the dyadic subsidiary-parent relationship, examination of corporate annual reports and press releases, and interviews with industry experts. Over 120 interviews with executives and managers in 63 MNEs were conducted in the course of the research. Neural network software was used in analysis of the qualitative data generated by the interviews.; Qualitative and quantitative evidence corroborates six of eight research propositions about key factors that contribute to subsidiaries' winning international or global mandates. Subsidiaries which earned mandates are associated positively with: mandate champions, greater competence and higher average earnings than their sister subsidiaries, product leadership, export experience, flexibility and strong interrelationships with the network of the MNE.