Chapter 8: The Embedded Multinational – An Empirical Illustration
In Chapter 7 the Embedded Multinational was presented. An important feature of the Embedded Multinational is the closeness of the business relationships in which the different sub-units are engaged. In Chapter 8 we explore this feature further by analysing, defining and operationalizing the concept of business embeddedness at the relationship and subsidiary levels. The discussion is underpinned by an empirical illustration, using data from a set of 98 subsidiaries in 20 MNC divisions belonging to twelve MNCs. NETWORK EMBEDDEDNESS AND INTEGRATION One main issue in the management literature about the MNC is the managers’ need to reach the right balance between local adaptation and global integration (see e.g. Doz 1986; Porter 1986; Bartlett and Ghoshal 1989; Dicken 1992). But according to our argument as presented in earlier chapters a business network develops over a long period of time and a subsidiary’s role in such a network is formed by interaction with customers, suppliers, regulators and competitors. It is shaped by management as well as by history. Therefore, if local adaptation can be analysed as mainly a question of management decisions, local business embeddedness cannot. While the former concept is often related to the adaptation of products and services to the specific needs of consumers in a certain country, the latter concept identifies the long-lasting structural consequences following such an adaptation. The issue of global integration within the MNC itself has thus also been somewhat reformulated. It is not primarily a question of deciding about the right balance between local adaptation...
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