Exploring the strategic role of subsidiaries in competence-creation

Guest editors: Rajneesh Narula and Alan Rugman

Henley Business School, University of Reading

MNEs are becoming increasingly knowledge driven and growing cross-border 
competition has led them to seek and develop knowledge assets in a wide 
variety of locations.Increasingly, the traditional view that knowledge 
creation and competence building are MNE-level phenomenon has been 
called into question (Birkinshaw and Hood 2001, Andersson et al 2002, 
Rugman and Verbeke 2001, Cantwell and Mudambi 2005). Competences are 
increasingly developed at the subsidiary level, although the extent to 
which this occurs is dependent upon a variety of factors, such as the 
degree of the subsidiary's embeddedness within the MNE's internal 
network as well as its external environment (Meyer et al 2011). The 
subsidiary's ability to play this dual role of tapping into local 
knowledge and engaging in knowledge exchange with other units is further 
influenced by the nature of its own mandate, the MNE's corporate 
strategy and the aspect of the value chain the subsidiary is engaged in 
(Rugman et al 2011). Large MNEs consist of a network of subsidiaries 
that are spatially distributed and perform heterogeneous functions.

This special issue of Long Range Planning examines the role of 
subsidiaries in the creation of knowledge and competence in MNEs.We 
welcome papers from a variety of contexts that advance our theoretical 
and empirical understanding of the processes that shape and determine 
subsidiary and competence-creation strategies. Key questions that may be 
addressed include:

·As these networks grow increasingly complex, with the fine-slicing of 
value chains, the use of non-equity relationships and multiple 
headquarters, how should MNEs most efficiently manage the knowledge 
generated by subsidiaries so that they can derive optimal benefits from 

·Competence-creating subsidiaries require considerable resources. Does 
this limit their use to larger MNEs? Is the role of competence-creating 
subsidiaries more limited than suggested by the literature, or a broader 

·How do competence-creating subsidiaries evolve into this role?

·Efficiently transferring newly created competences within the MNE's 
internal network require specialised complementary organisational and 
managerial assets. What is the nature of these complementary assets?

·Do we need a new typology of MNE organisational structures?

·To what extent do foreign subsidiaries serve as sources of 
technological capabilities and contribute to the exchange of knowledge 
in the MNE?

·What are the sources and implications of MNE subsidiary development? 
Does the competence-creating subsidiary require new theoretical approaches?

·Does subsidiary entry mode influence subsidiary technological 
evolution? What are the interactions between host country advantages and 
subsidiary technological evolution?

·What is the relationship between the knowledge infrastructure of the 
host country, and the kinds of linkages subsidiaries establish? Are 
there differences between subsidiaries located in different types of 
host countries?

·How do MNEs balance knowledge-tapping opportunities and knowledge 
spill-over risks for subsidiaries?

All submissions are expected to develop strong theoretical foundations 
and implement rigorous methodologies. These include quantitative 
studies, qualitative and case studies, multi-country comparative 
studies, replication studies and studies of specific subsidiaries and 
MNEs. Note that this special issue will publish 'conventional' academic 


Submissions will be accepted from July 1, 2011 until the submission 
deadline of November 1, 2011. Manuscripts should be prepared according 
to LRP's guidelines for authors, and will be reviewed in a double-blind 
review process. The review process adheres to a very ambitious schedule 
that aims at providing quick feedback to the authors and allows for two 
rounds of revisions on the manuscripts. Submission guidelines are 
available at

Papers may be submitted online at should 
clearly indicate that they are to be considered for this special issue. 
Select "SI: Competence-creating subsidiaries" when you reach the 
"Article Type" step in the submission process.

General enquiries about the special issue may be made to either of the 
special issue editors:

Rajneesh Narula: [log in to unmask] 
<mailto:[log in to unmask]>

Alan Rugman: [log in to unmask] 
<mailto:[log in to unmask]>

*Indicative literature*

Andersson, U., Forsgren, M. and Holm, U. 2002. The strategic impact of 
external networks: Subsidiary performance and competence development in 
the multinational corporation, /Strategic Management Journal/*23*(9): 

Birkinshaw, J.M & Hood, N. (1998) Multinational Subsidiary Evolution: 
Capability and Charter Change in Foreign Owned Subsidiary Companies. 
/Academy of Management Review/, 23(4), 773-795.

Birkinshaw, J.M & Hood, N. (2001). Unleash Innovation in Foreign 
Subsidiaries. /Harvard Business Review/, 79(3), 131-137.

Birkinshaw, J. & Pedersen, T. (2009). Strategy and Management in MNE 
Subsidiaries. In A.M. Rugman, (Ed), /Oxford Handbook of International 
Business/, 2^nd Edition (pp. 367-388). Oxford: OxfordUniversity Press.

Blomkvist, K. Kappen, P. and Zander, I. (2010) Quo vadis? The entry into 
new technologies in advanced foreign subsidiaries of the multinational 
enterprise, Journal of International Business Studies (2010) 41, 1525--1549.

Cantwell, J.A. and Mudambi, R. 2005. MNE competence-creating subsidiary 
mandates. Strategic Management Journal, 26(12): 1109-1128.

McCann, P. and Mudambi, R. 2005.Analytical differences in the economics 
of geography: The case of the multinational firm. /Environment and 
Planning A/, *37*(10): 1857-1876.

Meyer, K., Mudambi, R. and Narula, R. (2011) MNEs and Local contexts: 
location, control and value creation, /Journal of Management Studies/, 
48(2), 253-277.

Rugman, A.M. & Verbeke, A. (2001). Subsidiary-Specific Advantages in 
Multinational Enterprises. /Strategic Management Journal/, 22(3), 237 -- 

Rugman, A.M, Verbeke, A. & Yuan, W. (2011). Re-conceptualizing Bartlett 
and Ghoshal's Classification of National Subsidiary Roles in the 
Multinational Enterprise. /Journal of Management Studies/, 48(2), 253-277.

Rajneesh Narula
Professor of International Business Regulation
Director, John H. Dunning Centre for International Business
Henley Business School
University of Reading, UK

AIB-L is brought to you by the Academy of International Business.
For information:
To post message: [log in to unmask]
For assistance:  [log in to unmask]
AIB-L is a moderated list.