Winning strategies for subsidiaries

Around 40% of companies in the private sector in the UK are fully-owned subsidiaries of foreign multinationals. Managing the relationship with HQ whilst implementing growth at local level can be difficult, sometimes even conflicting.

by AIM
Last Updated: 23 Jul 2013

New research by the Advanced Institute of Management Research (AIM) outlines some of the challenges subsidiary managers must deal with. They often lack autonomy to devise a strategy of their own. They also have to vie for competition with other subsidiaries and, when doing so, must ensure they attract the right kind of attention.

Attention can come via two channels: external stimuli (media reports, industry reports) or internal stimuli (via the organisation, through reporting procedures etc). It can also be positive or negative: bottom-up or top down, directive or supportive, instrumental or symbolic.

AIM's report, Attention HQ: Strategies for UK subsidiary companies, identifies strategies which allow subsidiaries to attract the right kind of attention and get the balance right between attention and loss of autonomy.

Companies should, for instance, focus on establishing a good track record, giving their strategies credibility. They should also take initiatives and identify new opportunities for growth which would be beneficial for the MNC as a whole. And finally, subsidiaries should act as good citizens and demonstrate their attachment to the organisation.

Source: Attention HQ: Strategies for UK subsidiary companies
Julian Birkinshaw, Cyril Bouquet, Tina Chini
AIM, Dec 06

Review by Emilie Filou

Find this article useful?

Get more great articles like this in your inbox every lunchtime