IDEAS home Printed from https://ideas.repec.org/p/hhb/cbsint/1999-013.html
   My bibliography  Save this paper

How Foreign Subsidiaries Develop into Integrated Competence Centres

Author

Listed:
  • Gammelgaard, Jens

    (Department of International Economics and Management, Copenhagen Business School)

Abstract

Foreign subsidiaries acting as "integrated competence centres" is an organizational design that improves the building of capabilities in multinational corporations. In this knowledge-creating process the headquarter uses a bottom-to-top strategy, where the initial competence-building starts in independent and autonomous subsidiaries, exploiting their internal learning processes and relations to local advanced customers and science centres. The purpose of the subsidiary is to develop basic designs of future competitive products. The headquarter assigns mandates and resources for further development of the competence so it qualifies for global sales exploitation. After gaining a mandate the subsidiary concentrates its R&D within a focused area. Central monitoring systems and corporate socialization mechanisms secure the possibility of intra-organizational integration and utilization of competences. Further, knowledge transfers within the corporation help the competence centre with its product development. A case study of two foreign-owned Danish high technology subsidiaries test the approach. Both companies build up competence in focus areas, and use intra-organisational instruments to integrate knowledge. However, they differ in their historical background and how they gain the mandate for further competence development.

Suggested Citation

  • Gammelgaard, Jens, 1999. "How Foreign Subsidiaries Develop into Integrated Competence Centres," Working Papers 13-1999, Copenhagen Business School, Department of International Economics and Management.
    • Handle: RePEc:hhb:cbsint:1999-013
    as

    Download full text from publisher

    File URL: http://openarchive.cbs.dk/cbsweb/handle/10398/6543
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Julian Birkinshaw, 1996. "How Multinational Subsidiary Mandates are Gained and Lost," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(3), pages 467-495, September.
    2. Marina Papanastassiou, 1997. "Global-Innovation Strategies of MNEs and European Integration: The Role of Regional R&D Facilities," Palgrave Macmillan Books, in: Global Competition and Technology, chapter 6, pages 123-151, Palgrave Macmillan.
    3. Cohendet, Patrick, et al, 1999. "Knowledge Coordination, Competence Creation and Integrated Networks in Globalised Firms," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 23(2), pages 225-241, March.
    4. D. Charles Galunic & Kathleen M. Eisenhardt, 1996. "The Evolution of Intracorporate Domains: Divisional Charter Losses in High-Technology, Multidivisional Corporations," Organization Science, INFORMS, vol. 7(3), pages 255-282, June.
    5. Julian M Birkinshaw & Allen J Morrison, 1995. "Configurations of Strategy and Structure in Subsidiaries of Multinational Structure," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(4), pages 729-753, December.
    6. Robert Pearce, 1997. "Global Competition and Technology," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-25856-7, December.
    7. Gammelgaard, Jens, 1999. "Competence: A Dynamic Extension of the Existing Typology of Acquisition Motives," Working Papers 12-1999, Copenhagen Business School, Department of International Economics and Management.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Florian Becker-Ritterspach & Christoph Dörrenbächer, 2011. "An Organizational Politics Perspective on Intra-firm Competition in Multinational Corporations," Management International Review, Springer, vol. 51(4), pages 533-559, August.
    2. Klaus E. Meyer & Chengguang Li & Andreas P. J. Schotter, 0. "Managing the MNE subsidiary: Advancing a multi-level and dynamic research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-39.
    3. Dörrenbächer, Christoph & Gammelgaard, Jens, 2010. "Multinational corporations, inter-organizational networks and subsidiary charter removals," Journal of World Business, Elsevier, vol. 45(3), pages 206-216, July.
    4. Cerrato, Daniele, 2006. "The multinational enterprise as an internal market system," International Business Review, Elsevier, vol. 15(3), pages 253-277, June.
    5. Robert Pearce, 2001. "Multinationals and Industrialisation: The Bases of 'Inward Investment' Policy," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(1), pages 51-73.
    6. Klaus E. Meyer & Chengguang Li & Andreas P. J. Schotter, 2020. "Managing the MNE subsidiary: Advancing a multi-level and dynamic research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 538-576, June.
    7. Mei, Maggie Qiuzhu & Wang, Le & Yan, Jie, 2023. "Maintaining product quality consistency when offshoring to emerging markets: The role of subsidiary control," Journal of International Management, Elsevier, vol. 29(1).
    8. 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).
    9. Birkinshaw, Julian & Ridderstråle, Jonas, 1999. "Fighting the corporate immune system: a process study of subsidiary initiatives in multinational corporations," International Business Review, Elsevier, vol. 8(2), pages 149-180, April.
    10. Drogendijk, H.J., 2005. "The Development of Network Relations of MNC Subsidiaries : How Internal MNC and External (Local) Relations Evolve," Discussion Paper 2005-128, Tilburg University, Center for Economic Research.
    11. Slavo Radosevic, 2003. "The emerging industrial architecture of the wider Europe: The co-evolution of industrial and political structures," UCL SSEES Economics and Business working paper series 29, UCL School of Slavonic and East European Studies (SSEES).
    12. Tippmann, Esther & Sharkey Scott, Pamela & Reilly, Marty & O’Brien, Donal, 2018. "Subsidiary coopetition competence: Navigating subsidiary evolution in the multinational corporation," Journal of World Business, Elsevier, vol. 53(4), pages 540-554.
    13. Lee, Hyoungjin & Chung, Chris Changwha & Beamish, Paul W., 2019. "Configurational characteristics of mandate portfolios and their impact on foreign subsidiary survival," Journal of World Business, Elsevier, vol. 54(5), pages 1-1.
    14. Fan, Di & Cui, Lin & Li, Yi & Zhu, Cherrie J., 2016. "Localized learning by emerging multinational enterprises in developed host countries: A fuzzy-set analysis of Chinese foreign direct investment in Australia," International Business Review, Elsevier, vol. 25(1), pages 187-203.
    15. Tina C Ambos & Sebastian H Fuchs & Alexander Zimmermann, 2020. "Managing interrelated tensions in headquarters–subsidiary relationships: The case of a multinational hybrid organization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(6), pages 906-932, August.
    16. Michael J. Enright & Venkat Subramanian, 2007. "An organizing framework for MNC subsidiary typologies," Management International Review, Springer, vol. 47(6), pages 895-924, December.
    17. 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.
    18. Dimitris Manolopoulos & Pavlos Dimitratos & Stephen Young & Spyros Lioukas, 2009. "Technology Sourcing and Performance of Foreign Subsidiaries in Greece: The Impact of MNE and Local Environmental Contexts," Management International Review, Springer, vol. 49(1), pages 43-60, February.
    19. Dörrenbächer, Christoph & Gammelgaard, Jens, 2006. "Subsidiary role development: The effect of micro-political headquarters-subsidiary negotiations on the product, market and value-added scope of foreign-owned subsidiaries," Journal of International Management, Elsevier, vol. 12(3), pages 266-283, September.
    20. Mudambi, Ram, 1999. "MNE internal capital markets and subsidiary strategic independence," International Business Review, Elsevier, vol. 8(2), pages 197-211, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhb:cbsint:1999-013. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lars Nondal (email available below). General contact details of provider: https://edirc.repec.org/data/iicbsdk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.