This book investigates how foreign subsidiaries of multinational corporations expand their presence and functional scope into foreign territories. It thereby focuses on how cross-border subsidiary mandates are obtained and how they develop over time. Multiple case-studies based on in-depth interviews with HQ and subsidiary management suggest that subsidiary internationalization represents a select MNC phenomenon and that associated foreign market mandates are only of temporary nature. Foreign subsidiaries appear to receive cross-border responsibility if their value proposition for overcoming liability of inter-regional foreignness is capable of more than offsetting any risk increase that stems from principal-agent relationships between corporate headquarters and foreign subsidiaries. Following the initial mandate gain, the subsidiary’s restrained access to HQ-like functions, intra-MNC competition and altering localization degrees in the market covered by the mandate puts the sustainability of cross-border responsibilities at risk. As a consequence, internationalization trajectories of foreign subsidiaries often follow discontinuous rather than gradual evolutionary paths. In addition, cross-border subsidiary mandates often appear to be predefined and temporary in nature. They might actually have a limited life span from their very conception.
Springer Fachmedien Wiesbaden; June 2013
- ISBN 9783658026684
- Read online, or download in secure PDF format
- Title: Foreign Market Subsidiary Mandates
- Author: Nicolas Lohr
Imprint: Springer Gabler
About The Author
Nicolas Lohr earned his doctorate from the University of Fribourg in Switzerland and received an MSc degree from the ESCP Europe in France. He’s a consultant with an international management consulting firm.