Linkages of Cross-Functional Units in Different Types of Subsidiaries

Abstract

The chapter examines the linkages of cross-functional units in different strategy types of subsidiaries. A strategic fit between strategy type and operational capabilities is proposed to explore the linkages of cross-functional units in subsidiaries of different strategy types, as well as different types of functional units belonging to subsidiaries of different strategy types. The research proposes four operational capabilities within subsidiaries and functional units, which are envisaged to determine their ability to manage intra-unit linkages, namely, the level of coordination of functional activities, the managerial philosophy, the configuration of functional activities within the subsidiary and the integration of functional activities. It is envisaged that a strategic fit would be positively associated with performance at the subsidiary and functional unit levels and lead to a systems fit.