The influence of internal and external networks on the evolution of MNC subsidiary roles in Taiwan

Authors:Guey-Huey Li; Joseph Chwo-Ming Yu; Dah-Hsian Seetoo

Journal: Chia Da Management Review. Dec. 2007, 27(2): 169-201.

Keywords: MNCs; Network Resources; Center of Excellence; Mandate

Abstract:
This paper explores how network resources influence MNCs subsidiary to gain, strengthen, maintain or lose the roles of center of excellence or mandates in Taiwan by grounded theory. We found that policies of headquarters, flows of resources within a MNC, the importance of a host country and initiative-taking by subsidiaries are important factors for the evolution of subsidiaries roles-the first two represent resources from internal networks and the last two represent resources from external networks. Intra-flow of resources within a MNC include knowledge, people, product, information and technology, etc. The conditions for getting intra-flow resources for a subsidiary are its reputation and a MNC's sharing culture. Sophisticated consumers, favorable host government policies and infrastructure, existence of key accounts, strong suppliers and competitors, and partners in other industries constitute external networks. Initiative taking by a subsidiary is positively related to strength of the local cooperative and competitive systems. In addition, different network resources affect a subsidiary to gain, strengthen, maintain or lose its strategic roles.