University of Twente Student Theses


Framework for Revising or Finding Subsidiary Strategic Orientation

Barghout, Sona (2019) Framework for Revising or Finding Subsidiary Strategic Orientation.

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Abstract:Subsidiaries of multinational corporations sometimes operate under the umbrella of corporate strategy, even if it doesn’t fit their objectives, local culture, or capabilities. Although there have been several pieces of research that promote the independent strategic direction of subsidiaries, there is hardly any research undertaken to find out how subsidiaries should find their strategic orientation based on what approach. Therefore, there is a need to provide those subsidiaries with a clear road map to guide them with the process of strategy formulation. In this thesis, I followed the Resource-based and Market-based perspectives accompanied by strategic foresight activities and research conducted on the parent company in order to propose a four-dimensional framework to be leveraged as a guideline for subsidiaries to find out their strategic orientation and asses its coherence with that of the parent company. In order to test the framework, a case study has been conducted on a subsidiary that has been part of different corporations and has struggled to find the right strategic position. Values and goals of the parent company related to the subsidiary (to assess the alignment), the internal resources and competences of the subsidiary, the relevant industry, and the future drivers of change as well as the current trends were examined, to come to a conclusion that even both Resource-based and Market-based views together are not sufficient to achieve a strategy which exempts from the risk of failure. Whilst, in addition, it is essential to define the trends and forces of change on micro and macro level of a company and move fast by manipulating “the sticky resources” in a way to utilize them more efficiently at the same time acquiring new fundamental resources, with aim of either defending against the future menaces or exploiting future opportunities that will drive the competition. The value of this work lies in proposing a springboard for subsidiaries, why not also for non-subsidiaries (by ignoring parent company dimension), to revise or find their strategic position. On the flip side hoping to lend additional support to the decision-makers of the case company in finding or revising the strategy while reshaping their strategic beliefs.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:70 social sciences in general
Programme:Business Administration MSc (60644)
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