My dissertation examines why subsidiary initiatives differ with
respect to their probability of survival and identifies
initiative-related factors which cause this difference. I conduct
this examination within the context of the global research and
development (R&D) organisation of a multinational company (MNC).
My research therefore intends to answer the research question: What
determines the probability of survival of an initiative sent by a
foreign R&D subsidiary?
To answer this research question, I proceed as follows. First, to frame the problem both in the subsidiary initiative and international R&D literature, I set out the problem of under-utilisation of R&D resources, i.e. the effect that most innovations still come from the MNC's parent firm, although the MNC controls the resources of its international R&D subsidiaries. Although past research has advocated that in such a setting, subsidiaries should take on an entrepreneurial stance and send initiatives to the parent firm to achieve leverage of their resources and capabilities, empirical results consistently suggest that the problem of under-utilisation is still not mitigated. This effect suggests that most subsidiary initiatives are bound to fail. Thus, an investigation of why one initiative survives while the other fails is appropriate.
To address this problem, I first develop a theoretical model of the subsidiary initiative process that is based on an analogy constructed on the basis of communication psychology. This model allows to identify six elements which shape the initiative process. For reasons of data availability for empirical testing and control of unobserved variance, I then focus on one of these six elements, namely, initiative characteristics. Subsequently, I develop six hypotheses which describe initiative characteristics upon which the survival or failure of a subsidiary initiative may depend.
After commenting on the statistical method of survival analysis I employ throughout this dissertation, I then test these hypotheses using a sample of 1,116 subsidiary initiatives I collected from the global R&D organisation of a Swiss MNC. I extracted these initiative data directly from the firm's initiative database. This research setting allows to collect unprecedented data on subsidiary initiatives, to rule out both problems of unobserved between-firm heterogeneity, unobservable environmental influences, and problems of measurement error from subjective respondents, and to study the MNC's intrafirm organisation directly, rather than by proxy measures.
The findings show that initiative survival is positively influenced by social and geographical closeness of the sending R&D subsidiary to headquarters, by the initiative's alignment with the firm's core areas of activity, and by the manager's past success record, i.e. the number of already recognised initiatives sent by that manager. Moreover, initiatives that propose exploitative innovation are more likely to survive than initiatives that propose exploratory innovation. However, inter-subsidiary collaboration is found to have no significant influence on initiative survival.
Finally, I discuss the findings and outcomes of my research and show their implications for theory development and management practice. I also comment on some limitations which open up opportunities for future research.
International management; innovation management; R&D; intrafirm network; capability transfer, econometric model; multivariate statistics; survey
Referent: Prof. Dr. Oliver Gassmann
Korreferent: Prof. Dr. Andreas Herrmann
|start of project||2004|
|end of project||2007|
strategic initiatives, global R&D
|contact||Marcus Matthias Keupp|