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Subsidiary Autonomy: The Case of Multinational Subsidiaries in Malaysia

Author

Listed:
  • Ron Edwards

    (Monash University)

  • Adlina Ahmad

    (Monash University)

  • Simon Moss

    (Monash University)

Abstract

This paper argues that the nature and extent of the benefits that FDI confers on host economies depends in part on the degree of autonomy enjoyed by subsidiary management. Survey evidence of multinational subsidiaries in Malaysia indicates that the autonomy conferred on local management is limited. Even where subsidiary management categorise their organisations as “decentralised”, their autonomy is limited to local operational matters. In general, the more integrated the subsidiaries in the global activities of the parent, the less their autonomy, which implies limits to their contribution to the Malaysian economy.© 2002 JIBS. Journal of International Business Studies (2002) 33, 183–191

Suggested Citation

  • Ron Edwards & Adlina Ahmad & Simon Moss, 2002. "Subsidiary Autonomy: The Case of Multinational Subsidiaries in Malaysia," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(1), pages 183-191, March.
    • Handle: RePEc:pal:jintbs:v:33:y:2002:i:1:p:183-191
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    Cited by:

    1. Deepa Mani & Kannan Srikanth & Anandhi Bharadwaj, 2014. "Efficacy of R&D Work in Offshore Captive Centers: An Empirical Study of Task Characteristics, Coordination Mechanisms, and Performance," Information Systems Research, INFORMS, vol. 25(4), pages 846-864, December.
    2. Urmas Varblane & Katrin Männik & Helena Hannula, 2005. "Autonomy And Performance Of Foreign Subsidiaries In Transition Countries," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 38, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    3. Dörrenbächer, Christoph & Gammelgaard, Jens & McDonald, Frank & Stephan, Andreas & Tüselmann, Heinz, 2013. "Staffing foreign subsidiaries with parent country nationals or host country nationals? Insights from European subsidiaries," Working Papers 74, Berlin School of Economics and Law, Institute of Management Berlin (IMB).
    4. Daniel S. Andrews & Phillip C. Nell & Andreas P. J. Schotter & Tomi Laamanen, 2023. "And the subsidiary lives on: Harnessing complex realities in the contemporary MNE," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(3), pages 538-549, April.
    5. Jonas Puck & Markus K. Hödl & Igor Filatotchev & Hans-Georg Wolff & Benjamin Bader, 2016. "Ownership mode, cultural distance, and the extent of parent firms’ strategic control over subsidiaries in the PRC," Asia Pacific Journal of Management, Springer, vol. 33(4), pages 1075-1105, December.
    6. Björkman, Anette & Piekkari, Rebecca, 2009. "Language and foreign subsidiary control: An empirical test," Journal of International Management, Elsevier, vol. 15(1), pages 105-117, March.
    7. Suma Athreye & Georgios Batsakis & Satwinder Singh, 2013. "Subsidiary Embeddedness is a Strategic Choice: Complementarity and the factors associated with different types of embeddedness," DRUID Working Papers 13-05, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    8. van Kranenburg, Hans & Voinea, Cosmina Lelia, 2017. "Nonmarket strategies predictors for foreign firms," Scandinavian Journal of Management, Elsevier, vol. 33(2), pages 82-92.
    9. Chiao, Yu-Ching & Ying, Kung-Pao, 2013. "Network effect and subsidiary autonomy in multinational corporations: An investigation of Taiwanese subsidiaries," International Business Review, Elsevier, vol. 22(4), pages 652-662.
    10. Matanda, Tandadzo & Ewing, Michael T., 2012. "The process of global brand strategy development and regional implementation," International Journal of Research in Marketing, Elsevier, vol. 29(1), pages 5-12.
    11. Young, Stephen & Tavares, Ana Teresa, 2004. "Centralization and autonomy: back to the future," International Business Review, Elsevier, vol. 13(2), pages 215-237, April.
    12. Urmas Varblane & Katrin Männik & Helena Hannula, 2006. "The autonomy of managers by business functions in the foreign subsidiaries from transition countries," University of Tartu - Faculty of Economics and Business Administration, in: Entrepreneurship in Estonia: policies, practices, education and research, volume 28, chapter 9, pages 172-193, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    13. Cavanagh, Andrew & Freeman, Susan & Kalfadellis, Paul & Herbert, Kendall, 2017. "Assigned versus assumed: Towards a contemporary, detailed understanding of subsidiary autonomy," International Business Review, Elsevier, vol. 26(6), pages 1168-1183.
    14. Griffin, Dale & Guedhami, Omrane & Li, Kai & Lu, Guangli, 2021. "National culture and the valueto implications of corporate environmental and social performance," Journal of Corporate Finance, Elsevier, vol. 71(C).
    15. Urmas Varblane & Katrin M??nnik & Helena Hannula, 2005. "Autonomy and Performance of Foreign Subsidiaries in five Transition Countries," William Davidson Institute Working Papers Series wp780, William Davidson Institute at the University of Michigan.
    16. Nguyen, Quyen T.K. & Almodóvar, Paloma & Wei, Ziyi, 2022. "Intra-firm and arm’s length export propensity and intensity of MNE foreign subsidiaries," Journal of Business Research, Elsevier, vol. 145(C), pages 288-308.
    17. Yamin, Mo & Sinkovics, Rudolf R., 2009. "Infrastructure or foreign direct investment?: An examination of the implications of MNE strategy for economic development," Journal of World Business, Elsevier, vol. 44(2), pages 144-157, April.
    18. Newburry, William & Zeira, Yoram & Yeheskel, Orly, 2003. "Autonomy and effectiveness of equity international joint ventures (IJVs) in China," International Business Review, Elsevier, vol. 12(4), pages 395-419, August.
    19. Jens Gammelgaard & Frank McDonald & Heinz Tüselmann & Christoph Dörrenbächer & Andreas Stephan, 2009. "Subsidiary Role and Skilled Labour Effects in Small Developed Countries," Management International Review, Springer, vol. 49(1), pages 27-42, February.
    20. Chun-Chien Lin & Yu-Ching Chiao & Tung-Lung Chang & Yu-Chen Chang, 2023. "The determinants of the use of process control mechanisms in FDI decisions in headquarters–subsidiary relationships," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.

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