Abstract
This paper studies how the managerial network in a multinational enterprise (MNE) influences the resource profiles of its subsidiaries. The network view of the MNE and the recent literature on MNE subsidiaries provide bases for suggesting two distinct mechanisms through which the managerial network exercises an impact: isomorphism of resource allocation practices and horizontal specialization. The theoretical predictions are tested with data about the network of lateral ties among subsidiary managers in a private nonprofit MNE and the budget allocations in its subsidiaries. Results indicate qualified support for isomorphism and strong support for specialization. When managers interact in a network, their decisions for resource allocation within their subsidiaries may influence the MNE resource configuration across subsidiaries as well.
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