Pull the Right Levers: Creating Internationally ‘Useful' Subsidiary Competence by Organizational Architecture

Item Type Journal paper
Abstract We study the effect of formal organizational architecture on the extent to which a focal subsidiary creates competence that is "useful" to other units of a multinational corporation (MNC). Elements of formal organizational architecture represent levers by which parent firm and subsidiary managers can realize their intentions. Building on motivation theory, we argue that an appropriate organizational architecture stimulates a subsidiary's motivation to create internationally "useful" competence so that its extent of competence creation will increase. We develop and empirically test hypotheses for three specific organizational elements, viz.: a home-base augmenting mission, interfaces with other MNC units, and the subsidiary's strategic and operational autonomy. Unique survey data from 287 subsidiaries provide intimate insights into the internal structure of MNCs and strongly support our account. We close by discussing the implications of our study for the academic literature, management practice, and future research.
Authors Palmié, Maximilian; Keupp, Marcus Matthias & Gassmann, Oliver
Journal or Publication Title Long Range Planning
Language English
Keywords Competence Creation; Organizational Architecture; Strategic Autonomy; Operational Autonomy; Multinational Corporation; Subsidiary
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date February 2014
Publisher Elsevier
Place of Publication Amsterdam
Volume 47
Number 1-2
Page Range 32-48
Number of Pages 17
ISSN 0024-6301
ISSN-Digital 1873-1872
Publisher DOI https://doi.org/10.1016/j.lrp.2013.10.007
Depositing User Prof. Dr. Maximilian Palmié
Date Deposited 08 May 2014 18:36
Last Modified 20 Jul 2022 17:20
URI: https://www.alexandria.unisg.ch/publications/231478

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Palmié, Maximilian; Keupp, Marcus Matthias & Gassmann, Oliver (2014) Pull the Right Levers: Creating Internationally ‘Useful' Subsidiary Competence by Organizational Architecture. Long Range Planning, 47 (1-2). 32-48. ISSN 0024-6301

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https://www.alexandria.unisg.ch/id/eprint/231478
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