An organizing framework for MNC subsidiary typologies

Abstract

Existing multinational subsidiary typologies tend to be derived from strategy types, rather than from examining the subsidiaries themselves. However, there seems to be limited convergence of results. We propose a four-dimensional subsidiary framework to understanding the national subsidiary based on the subsidiary's roles in capability creation and capability utilization within the multinational firm as well as the geographic scope and product scope over which the subsidiary has influence. The paper shows that this approach, grounded in the basic strategic choices of market and activity scope at the subsidiary level, allows for an organization and unification of earlier conceptualizations of the national subsidiary in a way that lower dimensionality frameworks cannot. The resulting typology provides a rich set of possibilities for further theoretical and empirical development. © Gabler Verlag 2007.