Abstract: Western companies have increasingly relocated parts of their value chain to offshore locations in the recent past. Extant research documents that offshoring exposes firms to challenges associated with coordinating geographically dispersed work. In this paper, we argue that vertical integration mitigates the negative effect of coordination difficulty between onsite and offshore locations and the performance of the offshoring venture. However, with experience, firms are able to manage coordination difficulty without recourse to unified governance. We test our theory by analyzing survey data from 709 offshoring implementations executed by 245 multinational companies based in the U.S. and Western Europe.

Abstract: We outline commonalities between studies of subsidiary decentralization and autonomous strategy-making in the international business and strategic management fields. This suggests that corporate headquarters should engage in strategy-making processes that provide a combination of formal direction for global efficiencies and autonomy for effective local responses. Strategic guidance from headquarters frames subsidiary decisions in line with corporate priorities and distributed decision power coupled with informal exchange of information facilitates strategic responses in tune with local market requirements. We identify some important nuances in the integration-responsiveness conundrum supported by an empirical study of 351 multinational subsidiaries. We discuss the implications for multinational strategy practice and suggest future research venues to investigate strategy-making in multinational firms.

Abstract: We argue that heightened governance challenges of distributed networks in offshoring/outsourcing relate to bounded rationality and reliability. The ability to exert influence over others in the network – and thereby reduce bounded rationality and reliability – depends on the network structure, the specific role performed and task characteristics. In this paper, we explore how a ship builder addresses governance challenges as it moves from a fully integrated business model to one that involves offshore outsourcing. Most interestingly, in this new model the firm no longer has the formal contract with the client and, hence, is no longer the ‘network hub’ despite remaining the ‘brand holder’. This loss of hub status closes off some avenues for influence, and prompts a search for novel solutions.

Abstract: This paper shifts away from the predominant focus of investigating subsidiary-parent interactions to explore the critical role of international interdependence across MNC units on subsidiary evolution. Drawing on nine case studies, we examine subsidiary strategies to influence role development. We uncover the critical role of coopetition competence enabling subsidiaries to balance between co-operative and competitive dynamics with sister units. This meta-competence infuses all other strategies of subsidiary role development, enabling subsidiaries to know what approach is appropriate and when and how to shift from co-operating to competing and vice versa. Theorizing further on seminal frameworks of subsidiary evolution, we challenge assumptions that autonomy and the pursuit of entrepreneurial initiatives are necessary and theorize that coopetition competences are an alternative mechanism for subsidiary role development in situations of internal interdependency.