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Business and Management.
Rarely are the linkages between theory and practice as apparent as those between the strategic renewal literature and current structural transformations being realised within many multinationals (MNCs). Strategic renewal promotes the transformation of capabilities, structural models and organisational reform. Similarly, we can see similarly how many MNC organisations, cognizant of both global and technological change are championing these key tenets in choosing a new path, and shifting from networks of mini-replica subsidiaries towards more task-driven, integrated systems of activities. The advance of this transactional approach to operations is driven by an aim to create greater efficiencies, eliminate duplication of efforts and the overarching view that within the network there should be one place for everything.
Many subsidiaries, as the recipients of change and in a state of transition, are now adopting more narrowly defined, specialised implementer roles, whilst also being exposed to greater monitoring and control by the headquarters. Surprisingly, despite a wide range of literature and research attesting to the value of subsidiary based contributions including learning, initiative creation and as a catalyst for innovation these fundamental changes have yet to be scrutinized in light of the potentially negative implications for the organisations ability to adapt, survive and innovate. In this paper we argue that reforms at the capability and structural level not only undermine subsidiary scope to contribute and innovate but may also signal an early warning sign of competence destroying change in the MNC. We trace the foundations of subsidiary based initiatives and innovations before addressing some prominent questions relating to organisational reform, strategic renewal and subsidiary based innovation with suggestions for future research.
Reilly, Marty and Sharkey Scott, Pamela, "Subsidiary Innovation:a Phenomenon Under Threat?" (2013). Articles. 19.