Refining a subsidiary evolution framework: clarifying key concepts

doi:10.1108/RIBS-03-2020-0029

Refining a subsidiary evolution framework: clarifying key concepts

2021-03-29

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DOI：10.1108/RIBS-03-2020-0029

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Purpose While the evolution of subsidiaries has received considerable research attention, the framework for understanding it has not evolved much since the late 1990s. The purpose of this paper is to add both clarity and depth to the work on the foundations for - as well as the processes of - capability creation and development as a subsidiary evolves. Design/methodology/approach This conceptual paper takes as its point of departure the micro-foundation literature, with a specific emphasis on the capability development literature. To describe capability creation and development, both the resource-based view and the resource management perspective are used here. Findings The paper adds a conceptual layer to the drivers of subsidiary evolution. To add further clarity regarding how capabilities are actually formed, the resources for capability creation and development are specified herein as entities, abilities and capacity. Arguments are also presented for why capabilities ought to be viewed as patterned behavior to decrease the terminological ambiguity surrounding the concept of capabilities. The process of capability creation and development with an emphasis on learning is brought forward. Further, capability typologies, in terms of substantive, managerial and dynamic capabilities, are presented to add specificity to the kinds of capabilities that are created and developed within a subsidiary. Originality/value Clarifying the concept of capability and how capabilities are formed by using advancements in the literature is important to add precision to the literature on the evolution of subsidiaries.

Keywords:

Subsidiary

Capabilities

Resources

Resource-based view

Evolution

Resource management

Multinational enterprise

Refining a subsidiary evolution framework: clarifying key concepts

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