Reading 7.2

Topics: Management, Corporation, Strategic management / Pages: 2 (465 words) / Published: Mar 14th, 2014
7-2 Tap Your Subsidiaries for Global Reach

This reading focuses on analyzing the headquarters and subsidiary relationship. Throughout the reading, we encounter: failed strategies of subsidiary management, the roles and responsibilities of such subsidiaries, as well as the way in which HQ could shape and control their relationship. The poor subsidiary management way shown in the example of EMI, who invented and marketed the CAT scan then failed to capitalize on this achievement, then to accept a takeover bid from a competitor. EMI failed where they did not adapt to the market outside of their HQ country; they were in need of resources with which to study data and responses; as well, they did not employ the motivation and empowerment to the managers of their subsidiaries. Many companies have been unsuccessful with these decisions, this being an effect of a united nations model that believes in a symmetrical treatment of all subsidiaries as well as of the HQ syndrome where subsidiaries are local implementers of HQ decisions.

The reading moves on to an example where P&G transitioned their failing UN model approach in HQ brussels; which held several European subsidiaries, to a successful structure of dispersed responsibility. P&G chose to create Eurobrand teams holding a country general manager leading a specific product. They were accompanied by counter part managers from other subsidiaries with interest in the product’s success. Their success was due to the commitment and thorough knowledge the local managers developed, along with the growing subsidiary relationships.

The reading then looks at the roles of subsidiaries. There four roles looked at are: strategic leader, contributor, implementer, and black hole. The strategic leader is an HQ partner; a competent subsidiary located in an important market for recognizing demand, developing and implementing strategy. Contributors are also competent subsidiaries who help work on strategy, however are not in

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