James H. Taggart

Strategy shifts in MNC subsidiaries

This paper critically reviews the model of subsidiary strategy proposed by Jarillo and Martinez and, based on the data from a survey of 171 MNC manufacturing affiliates in the UK, proposes an extension of their model. The key finding is the indentification of a group of affiliates (quiescent subsidiaries) in the low integration–low responsiveness quadrant, not previously identified in a study of this nature. Characteristics of the quiescent affiliate type are explored, and the determinants of strategy stability and strategy change over time are evaluated. It is concluded that differences between the extended model and the original may lie in basic strategic differences between Spanish and UK affiliates.

Determinants of autonomy in multinational corporation subsidiaries

This paper reports on a survey of German and Japanese manufacturing affiliates located in the British Isles. One focus of interest is the degree of autonomy possessed by the subsidiary, and linkages between this and a range of strategic variables is explored. A second element of the investigation examines how the level of autonomy may be predicted from a smaller number of significant strategic variables. The paper concludes with a discussion of the implications of high autonomy at subsidiary level and some reflections on ramifications for multinational corporation (MNC) parents and policy makers. High-autonomy subsidiaries are identified as critical for the economic development objectives of policy makers.

Combining technology and corporate strategy in small high tech firms

Abstract The gap between technology management and business planning in the small high tech firm has been variously described as an opportunity area, a source of strategic weakness, and a root cause of competitive disadvantage. Similarly, the link between technology strategy and corporate strategy has been viewed as a natural concomitant of growing maturity in the small high tech firm, an integral and necessary evolution in corporate philosophy, and a positive task for an increasingly professional management team. The purpose of this paper is to report on an empirical research project into these issues. A survey of 223 small high tech firms located on science parks was carried out, though the analysis presented here concentrates on the 150 or so of the sample that carried out in-house R&D work. The discussion indicates a strong evolutionary effect within which firms demonstrate a high degree of informality and flexibility in early stages of the firms life in terms of both technology strategy and overall business strategy. As the firm develops, formality increases significantly and the technology-push imperative gives way to a powerful market orientation. The results give empirical support to a number of concepts that have been developed in the literature in small high tech firms, and also raise a question about the impact of multinationality on the development of such firms.

Determinants of increasing R&D complexity in affiliates of manufacturing multinational corporations in the UK

The aim of this paper is to evaluate the technological trajectories of the UK subsidiaries of manufacturing multinational corporations as measured by changes in their RD of the respondents that had been established in Britain for at least five years, 16 were found to demonstrate decreasing and 48 increasing complexity of R&D activities. These 64 firms were compared across a number of strategic variables, and a powerful logistic regression model developed that predicts technological trajectories with great precision. The key variables in the model were differences (over five years) in sales volume, decision making autonomy about human resource matters in the subsidiary, sensitivity to the needs of sister subsidiaries when developing new products, heterogeneity of the subsidiarys markets, and the degree of localization of certain control functions. The central lesson for the subsidiary R&D manager is that HQ undertakings about R&D strategy as it concerns the subsidiary may be fairly accurately evaluated via the model and its five strategic variables.

Configuration and Coordination at Subsidiary Level: Foreign Manufacturing Affiliates in the UK

This paper develops Porters (1986) well-known configuration/coordination paradigm for strategy at corporate level into a model that may be applied to identify and evaluate strategy at subsidiary level. Four strategy types are identified: detached subsidiary (corresponding to Porters export-based corporate strategy), autarchic subsidiary (corresponding to the country-centred corporate strategy), confederate strategy (corresponding to high foreign investment with extensive coordination), and the strategic auxiliary (purest global strategy). Empirical data were obtained from a postal survey of 500 randomly chosen foreign manufacturing affiliates in the UK, of which 171 responded. The proposed strategy types were identified using cluster analysis and verified using analysis of variance. The four subsidiary strategy types were found to be separated by a number of operational variables including market scope, flows of material inputs and outputs, the nature of manufacturing technology employed and the degree of R&D complexity. The proposed framework was thus found to be useful and robust.

The process of subsidiary strategy: a study of Ciba‐Geigy Classical Pigments

This paper analyses the strategy of Ciba‐Geigy′s industrial division at three hierarchical levels, concentrating on subsidiary strategy in the Classical Pigments business. The analysis makes use of a number of models: the BCG matrix, White and Poynter′s model of subsidiary strategy, Porter′s configuration‐co‐ordination paradigm, and Prahalad and Doz’s integration‐responsiveness framework. The strengths and weaknesses of each are evaluated within this particular industrial environment. The main conclusion of the paper is that use of these four alternative analytical perspectives yields a more holistic view of strategy in the Classical Pigments business.

ACAS advice - a lost cause?

Previous research has highlighted the trend that ACAS advice has long been held in high esteem by both employers and employees alike. A study of small to medium sized manufacturing establishments in Renfrewshire, Scotland, suggests that employers prefer partial advice as opposed to impartial advice. Instead they may turn to alternative bodies other than ACAS which have the ability to offer employee relations “support”, which is beyond the remit of ACAS. In light of limited resources due to funding constraints, the implications for the provision of ACAS advice are examined in relation to alternative bodies offering employee relations help.

Strategy Development in German Manufacturing Subsidiaries in the UK and Ireland

In recent years, international business research has thrown much light on the processes through which multinational corporations develop and implement strategy, and a number of useful paradigms have been developed to model aspects of such processes. Following the general methodology of Jarillo and Martinez (1990), this chapter evaluates and interprets the roles played by manufacturing subsidiaries of multinational firms in the UK and Ireland using a sample of German-owned firms to test the framework developed. An alternative taxonomy is evolved using decision-making autonomy, market technology scope, and integration as dimensions. This paradigm helps to explain strategy evolution within the subsidiaries and may guide policy makers responsible for encouraging cross-border investment within the European Union or, indeed, in other regions.

Autonomy and Procedural Justice: Validating and Extending the Framework

Some studies of the multinational corporation (MNC), despite adoptings a headquarters (HQ) orientation, have attempted to identify the kinds of role that subsidiaries may suitably assume in international networks. Bartlett and Ghoshal’s (1986) model of national subsidiary roles was developed from a study of major MNCs in global industries. They identify two main HQ views of the world: the ‘UN model assumption’, whereby all foreign subsidiaries are treated in a very uniform manner, and the ‘headquarters hierarchy syndrome’, which deems that all strategy and resource control activities belong naturally at the centre. While these views, either singly or in combination, may well be appropriate in some circumstances, general application would lead to a multitude of demotivated subsidiary managers. As an alternative, Bartlett and Ghoshal propose a model based on two dimensions: the competence of the local subsidiary and the strategic importance of the local environment to the MNC’s global aspirations. Subsidiary roles developed from the model (strategic leader, contributor, implementer, black hole) recognize that within any particular MNC there will be a wide variation in the overall ability of management teams at the subsidiary level, and that these teams are organic entities and are therefore likely to develop in competence over time. By means of a skilful mingling of the authorities and responsibilities of corporate and subsidiary managers they may each become more aware of, and more sensitive to, the nature of the problems faced by the other. Practitioners will readily recognize that this is a more empathetic perspective than the rather mechanical and deterministic approach of, for example, the configuration–coordination paradigm (Porter, 1986a; Taggart, 1997c).

Second stage internationalisation: Evidence from MNC manufacturing subsidiaries in the UK

First stage internationalisation begins when a firm begins to export, and reaches maturity with the establishment of one or more foreign manufacturing subsidiaries. Initially, a manufacturing subsidiary may service only its local market but, in time, the subsidiary begins to export its output to other countries, thus engaging in second stage internationalisation. This paper examines the activities of a sample of UK‐based manufacturing subsidiaries of multinational corporations that are engaged in second stage internationalisation, assesses the linkages with other operating characteristics, and identifies strategy parameters that are associated with second stage internationalisation. In particular, attention is focused on the degree of autonomy enjoyed by the subsidiary, on the extent to which it is integrated with other affiliates within the parent network, the extent of configuration and coordination applied to its activities, and on the subsidiarys propensity to adjust its local responsiveness as it in...