Entrepreneurship In Multinational Subsidiaries : The Effect of Entrepreneurial Competencies on Subsidiary Influence

Abstract: Research suggests that the position of subsidiaries within the multinational corporation (MNC) network has been strengthened over time and as a result, the subsidiary’s ability to exert influence over decisions taken by headquarters and other MNC entities has improved. One of the drivers behind this changed corporate structure is the need of the MNC for innovation, which has lead MNC headquarters to recognize entrepreneurial activities at subsidiary level. In this paper, the connection between subsidiary entrepreneurship and subsidiary influence is examined and it is argued that internal traits held by subsidiaries, which promote entrepreneurial performance, can function as a resource that other entities within the MNC network become dependent upon. From this dependence, influence is received by the subsidiary holding this resource, in accordance to resource dependence theory. Hypotheses are formed and tested using data collected through 60 questionnaires completed by subsidiary managers. The analysis suggests that a quite large portion of the influence subsidiaries obtain can be explained by their internal entrepreneurial capabilities. Recommendations for future research are suggested.