Horizontal relationships between subsidiaries within an MNC are rarely shown on an organisation chart but the interactions along this dimension are critical to the achievement of an MNC’s global operations and strategic activities. Different interaction logics of social relationships and economic exchanges in horizontal relationships induce simultaneous competition and collaboration between the subsidiaries.
Collaboration and competition is a business reality in inter-subsidiary relationships as they collaborate to share resources and knowledge, but ultimately compete for resources, customers and profits. While much research has focused on the effects of internal collaboration, and to a lesser extent internal competition, on organisational performance, little is known about the antecedents of competition and collaboration and the interplay of simultaneously occurring interactions. By focusing on one or the other, any understanding of the inherent tensions between the two is overlooked.
This research explores the coopetitive nature of the inter-subsidiary relationship using a qualitative approach within three MNCs, where internal competition and collaboration are more salient. Data were gathered from 98 semi-structured interviews with top and senior management, top management focus groups and a body of secondary data including internal reports, policy documents and external publications, among others, has been referenced.
The study makes three key contributions. First, by extending Luo’s (2005) theoretical model of intra-MNE coopetition, the study identifies additional respective antecedents of competition and collaboration. Second, the study locates inherent tensions arising from inter-subsidiary coopetition and explicates how the tensions are managed by the HQ and subsidiaries using spatial, balancing and assessing mechanisms and specific interventions. Third, the study offers an empirically-based model of inter-subsidiary coopetition with a more dynamic and temporal set of multiple relationships among the subsidiaries within the MNCs. Management implications include that senior management teams be aware of the opportunities and constraints of promoting a culture of collaboration while simultaneously fostering inter-subsidiary competition through internal accounting policies and incentive systems, and that the capability of senior managers to work effectively within dual organisational structures be developed and incorporated into executive development programmes