Why can´t you behave like your sister? A thesis studying subsidiary behaviour in the vehicle manufacturing industry

Abstract

As multinational corporations (MNCs) expand and extend their reach across the globe, there is an increasing need to establish new subsidiaries and reorganize existing ones. As a result of the MNC network growing and changing over time, subsidiaries and parent companies are pressured to implement new practices and means of coordinating their activities, which in turn affects subsidiaries’ behaviour. This study aims to further investigate how subsidiaries behave after the reorganization and implementation of a new coordination practice, and what main factors affect subsidiary behaviour. The authors studied the phenomena of subsidiary behaviour, using a case study approach with Volvo Buses and their Global Purchasing department as case companies, specifically investigating their subsidiaries in Poland and Mexico. The findings illustrate that subsidiary behaviour is strongly affected by institutional factors, managerial power, and knowledge transfer, as anticipated. More importantly, though, the findings show that individuals’ perception of roles and responsibilities, together with the previously mentioned factors, affect subsidiary behaviour, thus expanding the existing knowledge on subsidiary behaviour.