The Concept of Autonomy in the Subsidiary Management Research

Abstract

This paper considers multinational enterprises (MNEs) as differentiated global corporate networks where subsidiaries have unique resources and are able to act with considerable autonomy. Within the broad context of transnational management research and the specific sub-topic of subsidiary management, the concept of autonomy is usually approached through the extent of (de) centralization and formalization of decision making. In this paper, we shall argue that in the management of headquarters (HQs)-subsidiary relationships, decentralization and autonomy cannot be used interchangeably. The formal and legitimate authority to take decisions represents those dimensions of autonomy which are assigned to the subsidiaries by the HQs. Other variants of autonomy can be traced to the development of the subsidiaries' own capacities (earned autonomy), and their interconnectiveness with both corporate (internal) and host-country's (external) networks (acquired autonomy).