Configurations of Strategy and Structure in Subsidiaries of Multinational Corporations

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Configurations of Strategy and Structure in Subsidiaries of Multinational Corporations Author(s): Julian M. Birkinshaw and Allen J. Morrison Source: Journal of International Business Studies, Vol. 26, No. 4 (4th Qtr., 1995), pp. 729-753 Published by: Palgrave Macmillan Journals Stable URL: http://www.jstor.org/stable/155297 . Accessed: 06/04/2013 06:34 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp

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CONFIGURATIONS OF STRATEGY AND STRUCTURE IN SUBSIDIARIES OF MULTINATIONAL CORPORATIONS Julian M. Birkinshaw* Stockholm School of Economics Allen J. Morrison**

American GraduateSchool of InternationalManagement Abstract. A three-fold typology of subsidiary roles (world mandate, specialized contributor, local implementer) was induced from the literature and its empirical validity was confirmed. Adopting a configurational approach, we then explored the ways in which subsidiary 'structural context' varied across subsidiary role types. Structural context characteristics were determined through a discussion of the underlying principles of the 'hierarchy' and 'heterarchy' models of multinational organization. The key findings were: (a) higher strategic autonomy in world mandates than in local implementers; (b) a more internationallyconfiguredvalue-chainin world mandates and specialized contributorsthan local implementers;(c) lower levels of internal product flows in world mandates than the other two types; and (d) a significantly lower performance in specialized contributors. Implications for a configurationalmodel of subsidiary management, and for heterarchy as a higher level conceptualization, are discussed.

Researchinto the MultinationalCorporation(MNC) evolved in two critical directions during the mid-eighties.First, a shift in emphasis towards the multinational as subsidiary a unit of analysiscreateda good understanding of the variousstrategicroles that subsidiaries take on [Bartlett& Ghoshal 1986; Jarillo& Martinez1990;Roth & Morrison 1992].Second, researchers began to explorenew conceptualizations the MNC that challengedmany of the of assumptionsunderlyingtraditional organizationalanalysis [Hedlund 1986; Ghoshal 1986].The parallelgrowthof these two lines of inquiryis testament to their common empirical,and in many cases theoretical,roots. However, what is surprisingis the lack of work that specificallyaddressesthe linkages betweenthe two. In essence,the formerstreamhas focusedon the meaningof strategyin the MNC subsidiary,while the latter has emphasizedstructure. *Julian M. Birkinshaw is Assistant Professor of International Business at the Stockholm School of Economics, Stockholm, Sweden. **Allen J. Morrison is Associate Professor at the American Graduate School of International Management (Thunderbird), Glendale, Arizona. The first version of this paper was presented at the Academy of International Business annual meeting, Maui, 1993. We would like to thank Andrew Inkpen and three anonymous reviewers for comments on earlier versions of this paper. Received: January 1994; Revised: October 1994, February & March 1995; Accepted: March 1995.

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