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Upgrading Foreign Subsidiaries in the Case of a German Multinational Company: Bargaining Processes at Strategic and Operative Levels.

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    • Abstract:
      This article looks at the evolvement of a foreign subsidiary from exploiting to augmenting and asks which strategic decisions and bargaining processes induce this shift. We add to the existing literature by describing and analysing various sources of power and bargaining processes occurring at both the strategic and operative levels. In an explorative case study of a German MNC that upgrades its Chinese subsidiary, we derive several propositions. First, we suggest that bargaining involves a process in which the power resources need to be enacted. This needs time and competences. An important aspect of this empowerment is the assignment of local managers. Second, we suggest that informal linkages complement the formal set-up and decisively influence how power is being distributed. Finally, we underline the importance of the operative level in fostering and blocking decision-making processes in the MNC. The analysis of strategic bargaining in MNCs hence needs to take into account more explicitly the importance of the operative level and its interdependence with strategic management. [ABSTRACT FROM AUTHOR]
    • Abstract:
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