Document Type

Article

Rights

Available under a Creative Commons Attribution Non-Commercial Share Alike 4.0 International Licence

Disciplines

5.2 ECONOMICS AND BUSINESS

Abstract

Intensifying international competition, increasing volatility, and systemic technological and political transformations (Dunning, 1995; Hitt, Keats and DeMarie, 1998) constitute the current competitive landscape for organisational activities (Sampler, 1998). To successfully adapt to these challenges and find new ways to renew fast obsolescing firm-specific advantage (Buckley and Casson, 1976; 1998) a more holistic approach to organisational management is emerging. This involves the integration of the traditional strategic management or advantage seeking perspective with the more innovative or opportunity seeking dimensions of entrepreneurship (Hitt et al, 1998). Developing a culture of creating or identifying opportunities and exploiting them is fundamental to entrepreneurship (Hitt, Ireland, Camp and Sexton, 2001; Lumpkin and Dess, 2000; Zahra and Dess, 2001), and the subsequent diffusion of the ensuing knowledge and capabilities across the multi-national corporation’s (MNC’s) subsidiaries (Eisenhardt and Martin, 2000; Teece, Pisano and Shuen, 1997) can then generate sustainable competitive advantage, constituting the application of strategic entrepreneurship within the MNC.

The extension of strategic entrepreneurship across the multinational organisation to include its dispersed subsidiaries is intuitively appealing but at present there is a deficit of entrepreneurial theory at any organisational level (Brown, Davidsson and Wiklund, 2001; Sexton and Landstrom, 2000). This study contributes to theory development in this area by integrating aspects of strategic management and entrepreneurial theory at the subsidiary level of analysis. Strategic or entrepreneurial posture, as described by Miles, Covin and Heely (2001, pp. 65) ‘is demonstrated by the extent to which top managers are inclined to take business-related risks, to favour change and innovation in order to obtain a competitive advantage….and to aggressively compete’. Combining the strategic literature in relation to studies on subsidiary role and initiative generation with the entrepreneurship theory on firm level innovation and performance, it is proposed that several contextual factors, including aspects of the parent / subsidiary relationship influence subsidiary entrepreneurial posture. A range of variables representing subsidiary context, which have not been previously assessed from this perspective are examined. In addition, a new measure to capture the influence of the internal MNC market on subsidiary behaviour is created.

DOI

https://doi.org/10.21427/D7X509

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