1. Subsidiary Evolution – Discussion
Ram Mudambi
EMBA BA 804

2. Alternative taxonomies
A competence-creating subsidiary mandate as part of a wider internationally integrated MNE strategy for innovation can be linked with other contemporary IB taxonomies

3. Alternative taxonomies – 1
Assembly-type
production
Research-related
Cantwell, 1987
Market-seeking
FDI
Asset-seeking
Dunning, 1995
Home-base
exploiting FDI
augmenting FDI
Kuemmerle, 1999

4. Alternative taxonomies – 2
Multi-domestic
strategy
Hetararchical,
Transnational
Hedlund, 1986
Bartlett & Ghoshal, 1989
Local subsidiary
mandate
Center of excellence
Subsidiary mandate
Birkinshaw, 1998
Holm & Pedersen
2000

5. Simplified model of strategy choice
MNE
Subsidiary WITH
competence-creating
mandate
Subsidiary WITHOUT
competence-creating
mandate
Competence-
creating R&D
Competence-
exploiting R&D
Qualitative
differences
Level of
R&D intensity
Level of
R&D intensity
Quantitative
differences

6. Results Drivers of R&D intensity differ dramatically
Firms W/O mandates
Firms WITH mandates
Significant
Drivers
Sales (+)
Financial risk (-)
Acquisition entry (-)
Input responsibility (+)
Diversification (-)
Assisted area location (-)
US, Japanese parentage (+)