Conclusions, Limitations and Future Directions

Abstract

In the development of the HQ-subsidiary model, this research further clarified the nature of the HQ-subsidiary relationship in the MNC by providing a detailed theoretical underpinning for a series of HQ-subsidiary connections. Based upon Chandler’s development of strategic contingency theory, the transaction cost approach and the knowledge- oriented variant of the resource-based view, a new model was presented. This model posited that the choice of advantage generating strategy employed by the MNC, the knowledge asymmetries that this strategy engendered, the subsidiary tasks, subsidiary autonomy, how the subsidiaries were controlled by HQ and the place of the subsidiaries in the knowledge management and innovation networks of the MNC were intimately and reciprocally interrelated features of the HQ-subsidiary relationship. While some of the links in this interplay had been addressed previously in the literature, this model was an important step forward because, for the first time, it synthesized, integrated and extended, often disparate, conceptual and empirical knowledge, to produce a new model of an important organizational phenomenon.