Does being based in an emerging market influence the positive attention multinational corporation subsidiaries obtain from headquarters

Abstract

This study assessed multinational corporations (MNCs) from developed markets with subsidiaries based in the emerging markets, to determine whether being based in a dynamic market influences the positive attention in terms of support and autonomy that these subsidiaries receive from headquarters. The purpose of the research was to expand on previous research conducted by Bouquet and Birkinshaw (2008) by surveying subsidiaries from emerging markets, and determining whether MNCs amend their attention strategy to subsidiaries based in emerging markets as a result of their limited understanding of the dynamics of the local business environment, or whether they maintain a standardised strategy for engaging all subsidiaries. 39 MNC subsidiaries from the emerging markets of Southern Africa, Latin America and the Middle East were surveyed via a web-based questionnaire, assessing various aspects of their business activities and local business environment to determine the type of positive attention which subsidiaries in these markets received from headquarters. The results indicated that the business environment within emerging markets is complex and requires alternative forms of assessment and involvement by headquarters, however overall subsidiaries based in emerging markets do not receive the support and autonomy from headquarters which is required to exploit local opportunities effectively.