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 Dear Colleagues

A few weeks ago, I have posted a request on AIB-L for texts useful for teaching subsidiary leadership in MBA or EMBA classrooms. I ask primarily for readings to assign to students, and secondly for useful case. I have some case of my own, but I struggle to pair them with appropriate readings.

Quite a few fellow AIB-L members replied. Some send me their academic papers that would not be accessible for practitioners. Others suggested cases, including quite a few very useful ones that I was not aware of before, and that I list below. One colleague, K.V. Mukundhan, actually answered my question and recommended readings to pair with such cases. My question regarding specifically emerging economy MNEs drew a complete blank. Thank you all for your contribution. I share the materials received below.

Let me first share two general observations. First, there seems to be little research or practice-articles that focuses on the strategy of the subsidiary as an entity, or on leadership of a subsidiary within the context of an MNE. Julian Birkinshaw’s now more than a decade old work is still the main contribution here (and his book is still a good read!).

Second, a lot of work focuses on the cross-cultural challenges faced by a newly-arrived expatriate lifted into a leadership role abroad. This is certainly important, but very partial. Nowadays many subsidiaries are run by locals, by folks who have been in the host country for 20+ years, or by serial expats. They face important issues e.g. around managing the relationships with HQ and on engaging with local stakeholders that have rarely been touched on in the literature from a subsidiary perspective.

Third, while we have seen a lot of research and a fair number of cases on the strategies of emerging economy MNEs, there is little work on strategy implementation, human resources, expatriates or any other question on ‘what happens after that first bold move?’

Overall, the IB literature has a strong bias towards looking at issues form the HQ perspective – which suggests to me that there is a lot of needs for more research! If interested read some of the teaching cases below to be stimulated!

 

Best wishes

Klaus Meyer, CEIBS, Shanghai

 

READINGS
Bouquet, C., Birkinshaw, J., & Barsoux, J. L. 2016. “Fighting the Headquarters Knows Best Syndrome”. MIT Sloan Management Review, 57(2): 59-66.
à discusses the tension based on a case

Christopher A. Bartlett and Sumantra Ghoshal. 2003. “What is a global Manager?” Harvard Business Review, 81(8): 101-108. à main focus on the capability profile needed to be a globe trotting manager

Gurkov, Igor. 2015. Articles based on Knauff CIS in Harvard Business Review Russia à in Russian language only; if interested contact Igor at [log in to unmask]

 

CASES

Expatriation: There is a lot of material on expatriate experiences, especially from the perspective of a newly arrived expatriate encountering a lot of cultural differences:

  1. Silvio Napoli at Schindler India (A) & (B) (by Chris Bartlett, 2011, HBS #9-303-086). A young Italian MBA working for a Swiss multinational is sent to India to establish a subsidiary and implement the strategy he prepared at headquarters as a strategic planner. Video interview with the Chief protagonist of the case available from HBS.

  2. Hans Fritz at Novartis Thailand (A), (B), (C) & (D) (by Carin-Isabel Knoop & Michael  Yoshino, 1999, HBS 399-123 & 399-124). Newly appointed head of Thai operation encounters a poorly performing organization and a variety of cross-cultural challenges.  

  3. Black & Decker-Eastern Hemisphere and the ADP Initiative (A) & (B) (by Allen J Morrison & J Stewart Black, 1998, HBS # 9A98G005).  Newly appointed Regional President is considering which staff appraisal development plan (ADP) to introduce in the ‘Eastern Hemisphere’ to enhance the company’s region-wide market performance.

  4. Joe Willis: Feeling the heat in Thailand (A), (B) & (C), (by Lynn A Isabella; Darcy Langlais; Gerry Yemen, Darden Business School, # UVA-OB-0898, UVA-OB-0899 and UVA-OB-0900). Executive is sent to Thailand with two other managers from corporate HQ to clean up and re-build a team following the discovery of fiscal mismanagement and a popular senior executive's high profile firing. The financial auditor has to strengthen relationships and performance in Thai operations, rebuild trust on the local management team, while encountering obstacles of working as an outsider.

  5. Microsoft South Africa: Corporate Entrepreneurship and Innovation (by Helena Barnard and Jonathan Marks, 2014, Ivey #9B14M161). A new managing director is appointed in Microsoft South Africa at a low point as the company has to address a wide range of local issues concerning  employees, partnerships, revenue and local relevance. The latter included regulatory compliance requirements regarding social transformation and Black Economic Empowerment codes. At the same time, the managing director needed to rebuild the relationship with head office.

  6. A case for global leadership: Kai Bendix. A German executive is appointed to head the India operations of Beiersdorf and encounters a number of operational and cross-cultural challenges. The video is available here for those who have a password: http://www.videoarts.com/leadership/a-case-for-global-leadershipkai-bendix-story/  I don’t know this service provider, by the website looks promising.

Subsidiary Leadership. There are fewer cases that look at subsidiary leadership challenges in a mature subsidiary where the relationships with HQ are just as much a challenge as the understanding of the local market. Curiously, none of the cases I found has a host country national a subsidiary head, even though that is increasingly common.

  1. Clayton Industries: Peter Arnell, Country Manager for Italy (by Chris Bartlett and Benjamin Barlow, 2010, HBS 4199). The successful country manager for the UK, has been asked to take over the Italian subsidiary, which has been struggling on several fronts. He must juggle the strategic objectives of regional HQ as well as those of global HQ while overseeing the day-to-day activities in Italy.

  2. Dürr AG: A German Premium Manufacturer Goes Mid-Market in China (by Meyer, Klaus E. & Zhu, Jianhua (Jenny), 2015, Ivey # 9B15M071). Recognizing the different market segmentation and competitive dynamics in China compared to the companies home markets in Europe, the subsidiary leadership team develops a machine for the fast growing mid-market, initially without HQ blessing. The case focuses on the mid-market phenomenon, why it is so important in China, yet so difficult to communicate to HQ.

  3. DHL Bangladesh: Managing Headquarter-Subsidiary Relationship, by Hemant Merchant & Masud Chand, 2008, Thunderbird International Business Review, 50(3): 201-210, with commentary by DHL Executive (p. 212-214). Teaching note available from the author: [log in to unmask]. A subsidiary manager in Bangladesh has to react to an HQ initiative to standardize HRM systems and to decide which system to adopt, the one favored by Regional HQ or a local one.

  4. Levendary Café (by Chris Bartlett & A. Han, 2011, HBS #4357). HQ-subsidiary conflict from the perspective of a newly appointed global CEO having to deal with a Chinese subsidiary.

Emerging Economy Multinationals: Apart from the work we do at CEIBS, I have not been able to find any case on operations of emerging economy MNEs abroad. Thus, I recommend:

  1. ShangGong Group: Chinese challenger acquires German premium brands (by Meyer, Klaus E., Chng, Daniel H.M. & Zhu, Jianhua (Jenny). 2015, Ivey #9B014M095). The Chinese machine builder acquired its premium segment German competitor and went through a drawn out process of post-acquisition integration that eventually was successful. The company then made further acquisitions in Germany, and the challenge starts anew.

  2. CNOOC engages with Canadian stakeholders (by Klaus Meyer & Alexandra Han, 2016, CEIBS, initial draft, available from the author upon request). This case focuses on the interaction of CNOOC with Canadian media and other stakeholders through events in the acquisition of Nexen and the subsequent operations: political approval process, oil price collapse, pipeline spill and factory explosion. Design to be used with publically available videos.

  3. There is good work in the pipeline by some of my colleagues at CEIBS, which should be available through the Shanghai Case Platform (http://www.chinacases.org/) in the near future – as should be their English language user interface.

Social Responsibility in the Subsidiary. It seems the only cases I can find is my own:

  1. German Chamber of Commerce develops social responsibility in China, 2016, (By Klaus Meyer, in M.W. Peng & K.E. Meyer, International Business, 2nd edition, p. 540-543). The Chamber of Commerce is deliberating what initiatives it might take to encourage and showcase good practice is social responsibility among

  2. Tackling corrupt practices: GSK China, 2016, (By Klaus Meyer, in M.W. Peng & K.E. Meyer, International Business, 2nd edition, p. 544-549). GSK got in a lot of trouble due to alleged corrupt practices in China; the case reviews the challenges  of operating in the Chinese health care system, leading into a discussion of how Western pharma companies can compete in such an environment.

 

Practitioner Interview (possibly supplementary reading)

  1. A Conversation With: Ravi Venkatesan, Former Chairman of Microsoft India, April 12 2013, New York Times, http://india.blogs.nytimes.com/2013/04/12/a-conversation-with-ravi-venkatesan-former-chairman-of-microsoft-india/?_r=1. Makes a strong case that corporate HQ need to get close to emerging economies to have a chance of succeeding.

 

SCHOLARLY STUDIES – as received:

Kieran M. Conroy, David G. Collings, 2016.  The legitimacy of subsidiary issue selling: Balancing positive & negative attention from corporate headquarters, Journal of World Business 51 (2016) 612–627.

Gertsen, Søderberg, Zølner, A.M., eds., 2012 ‘Global Collaboration: Intercultural Experiences and Learning’, PalgraveMacmillan.

Gurkov I. B. Oriflame CIS: The Successful Evolution of a Regional Subsidiary’s Mandate //Global Business and Organizational Excellence. 2016. Vol. 35. No. 4. P. 44-54. http://doi.org/10.1002/joe.21683

Gurkov I. B., Kossov V. V. Combining Contemporary and Soviet-Era Management Practices to Achieve Excellence at Knauf CIS // Global Business and Organizational Excellence. 2014. Vol. 33. No. 6. P. 21-34  http://doi.org/10.1002/joe.21570

McNulty, Y. & Selmer, J. eds. 2017. Research Handbook of Expatriates, Cheltenham: Elgar. While focusing on the challenges of expat managers some of the chapters also focus on subsidiary leadership,

Søderberg A.M., 2015. ‘Recontextualising a strategic concept within a globalising company: a case study on Carlsberg's ‘Winning Behaviours’ strategy’

 

 



Klaus Meyer, PhD
Professor of Strategy and International Business
www.klausmeyer.co.uk
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