Reconceptualising Hierarchies: The Disaggregation and Dispersion of Headquarters in Multinational Corporations

In this paper, we provide an introduction to the Special Issue entitled "Divide and Rule? The Emergence and Implications of Increasingly Disaggregated and Dispersed Headquarters Activities in Contemporary Firms". The purpose is two-fold. First, we propose a conceptualization of headquarters activities as a dynamic system in which activities can be distributed organizationally and spatially. We explicitly break with the dominant view of the prior research on "the headquarters" as a single, identifiable unit in one specific location. Second, building on the manuscripts accepted for publication in this Special Issue, we outline research implications and put forward an agenda for research on the emergence and continuous management of disaggregated and dispersed headquarters systems

Competence-creating overlaps and subsidiary technological evolution in the multinational corporation

This paper explores overlapping competence-creating activities within the boundaries of the multinational corporation by investigating how foreign greenfield subsidiaries' technological evolution is affected by the addition of an acquired unit in the same location. Drawing upon the complete U.S. patenting activity by subsidiaries of 21 Swedish multinationals over the 1893-1990 period, we use repeated event history analysis to test a set of hypotheses concerned with the effect of this competence-creating overlap. Findings include an initial retrogressive effect on greenfield subsidiaries' technological evolution as a result of competence-creating overlaps, which, over time diminishes to become positive after more than a decade of overlap exposure. Thus, we add to the theory of subsidiary evolution by expanding the view of the archetypal subsidiary that has so far been constrained to evolve without operational overlaps.Multinational corporation Subsidiary evolution Internationalization of technology and R&D

Win, Place, or Show? : How Foreign Investment Strategies Contribute to the Technological Growth of the Multinational Corporation

This paper investigates the sources of technological growth of the multinational corporation. We conceptualize and shed empirical light on whether foreign investment strategies based on advanced greenfield subsidiaries, acquired subsidiaries, or a combination of both increase the likelihood of entry into technologies that represent new additions to the MNC’s technology portfolio. Repeated events analyses of the complete U.S. patenting activity in 226 foreign locations of 21 Swedish multinationals reveal a substantially higher likelihood of entry into new technologies among investment strategies based on foreign acquisitions, as opposed to investment strategies based on greenfield establishments only. To the extent MNC managers seek to enhance technological and strategic renewal through the expansion of foreign operations, the findings suggest that foreign investment strategies that involve the use of acquisitions are and should be the preferred alternative

Weathering storms – Technological exploration of MNCs in times of financial crisis

We generate new knowledge about financial crises and their consequences for MNC technological development, thereby addressing a largely uncharted issue at the crossroads of the organization, strategy and international business literatures. Drawing on threat-rigidity theory, we argue that financial crises have an overall negative effect on MNC technological exploration and that the strength of the effect differs across greenfield and acquired subsidiaries. Results from an empirical investigation of 21 MNCs over the 1890–2008 period suggest that the dampening effect of financial crises on technological exploration is confined to home-country units and greenfield subsidiaries, whereas it is found to be of less significance among acquired foreign subsidiaries. We suggest that such differentiation within the MNC is indicative of a previously unobserved advantage from multinationality, which allows it to smoothen the effects of financial crises on long-term technological development and corporate growth.QC 20230123</p

Headquarter resource allocation strategies and subsidiary competitive or cooperative behavior : achieving a fit for value creation

Integrating insights from the literature on the multinational corporation into current perspectives on resource allocation, we argue that the ability of headquarters to create value through resource allocation to subsidiaries within the multinational corporation is contingent on the complementary fit between the resource allocation strategy and the dominant behavior of the receivers of the resources. We expound on a theory and an explanation for the volatility of value creation generated by headquarter resource allocation that includes multiple layers of hierarchy. As a corollary, we extend and contribute to the theorizing on headquarters-subsidiary relations and resource allocation by illustrating different scenarios of the resource allocation process. More specifically, we develop a two-by-two matrix of the resource allocation process that corresponds to different resource allocation strategies of headquarters (winner-picking and cross-subsidization) and subsidiary behavior (collaboration or competition) in multinational corporations. We argue that, depending on which scenario within the matrix is brought to the fore, our understanding of how the resource allocation process plays out between headquarters and subsidiaries will differ and therefore influence value creation within the multinational corporation

Superstar inventors - Towards a people-centric perspective on the geography of technological renewal in the multinational corporation

This paper develops a people-centric perspective on the geographical dispersion of technological renewal in the multinational corporation (MNC). We contend that a large proportion of all foreign technological advancements can be attributed to a handful of individual inventors, suggesting a blockbuster effect of subsidiary technological development. This suggests that analyses carried out at the subsidiary or firm level disguise significant yet largely unexplored variation in the technological contributions made by individual members of these foreign units. To support this proposition, the paper draws upon an original data set that comprises all of the advanced foreign subsidiaries of 21 Swedish MNCs between 1893 and 2008, and follows their patenting activity in order to document the distribution of inventive activity, both across and within individual subsidiaries. The findings at the subsidiary level show that the distribution of technological activity and contribution to the overall multinational group is significantly skewed; the paper then empirically explores the assumption that a similar distribution also applies at the level of individual inventors. The results point to a pattern whereby most inventors make only occasional and limited technological contributions and, instead, more significant numbers of new technological discoveries are attributable to a select group of exceptionally inventive individuals. In the light of the results, we suggest the fruitfulness of applying a people-centric perspective on the sources of sustained competitive advantage of the MNC, the management of geographically dispersed capabilities in the multinational network, and the geographical sources of technological renewal in the MNC

Quo Vadis? : The entry into new technologies in advanced foreign subsidiaries of the multinational enterprise

The international business literature has identified the overall emergence of technologically advanced foreign subsidiaries of the multinational enterprise (MNE), but little is known about the extent to which individual subsidiaries are able to sustain their contribution to the technological and strategic renewal of the multinational group. This paper takes on this neglected question by empirically investigating longitudinal patterns in advanced foreign subsidiaries’ entry into technologies that are new to the entire multinational group. Repeated events analysis that draws upon the complete US patenting by 211 greenfield subsidiaries of 21 Swedish multinationals over the period 1893–2008 reveals accelerated entry into new technologies, but at moderate hazard rates. The results lend support for established theorizing about the evolution of technological capabilities in greenfield subsidiaries, but question extreme views on their growing strategic importance for the MNE. It appears instead that significant additions to the technological and strategic renewal of the multinational group should be discussed in the context of a select number of “superstar” subsidiaries, not necessarily what are believed to be general developments across all subsidiaries of the MNE