Relationships Between MNC Subsidiaries – Opening a Black Box in the International Business Field

In today's global economy, many firms have their value-creating activities dispersed in various countries and regions (Porter 1980, 1989, Kutschker/Schmid 2008, pp. 996-1006, Schmid/Grosche 2008, 2009). According to their respective business models, many multinational corporations (MNCs) consider the direct and immediate host country presence through legally independent engagements as vital for their economic success. Hence, they establish or acquire (foreign) subsidiaries to carry out or bundle activities.

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How these foreign subsidiaries are managed by headquarters, which tasks they fulfill and what their position in the overall organization is can vary considerably, though. International business (IB) scholars have brought about a considerable amount of research on both headquarters-subsidiary relationships (for example Baliga/Jaeger 1984, Gates/Egelhoff 1986, Gupta 1987, Martinez/ Jarillo 1989, Birkinshaw/Morrison 1995) and subsidiary roles (see Schmid et al. 1998, Schmid/Kutschker 2003, Schmid 2004 or Kutschker/Schmid 2008, pp. 338- 363 for overviews).