Denice E. Welch

Using personnel to develop networks: An approach to subsidiary management

The interaction model has provided a useful analytical tool to explore relationships which extend beyond the original industrial marketing and purchasing context. This paper outlines subsidiary networks and the resultant relationships. Three possible networks are identified: HQ subsidiary; subsidiary-to-subsidiary; subsidiary-and external environment. Staffing decisions are examined as a means of developing subsidiary network relationships. These networks are then considered as a potentially important tool in facilitating the management process, thereby enhancing the ultimate effectiveness of the subsidiary and overall global operations. USING PERSONNEL TO DEVELOP NETWORKS: AN APPROACH TO SUBSIDIARY MANAGEMENT The interaction model has contributed much to our understanding of relationships between business parties, and has provided a useful analytical tool to explore both intraorganization and interorganization linkages and relationships. The concept of a network is built upon social exchange theory and the resultant relationships between actors. The exchange process that over time leads to the development of interdependent activities links the actors into a network, and the survival of the network depends on continuing exchange activities (Thorelli, 1986; Hakansson and Snehota, 1989; Andersson et.al 1990). The strength of a network depends on how the various actors perceive the value of the relationships, and this will vary over time. Network management involves considerable and multifaceted effort (Thorelli, 1986). Much of the early work in developing the network model focused on industrial marketing situations. This framework has since been applied in studies of a growing range of industries and functions for example, professional services (Yorke, 1990); relationship banking (Turnbull and Gibbs, 1990); technology (Welch, 1985). However, the role of networking in the process of managing multinational organizations has as yet received limited attention. It is this application of the interaction model which is the subject of our paper.