The Phoenix Factor: Subsidiary Evolutionary Trajectories Post Mandate Loss

Abstract

We examine the event of subsidiary R&D mandate loss and processes that determine a subsidiary’s subsequent evolutionary trajectory. R&D mandates reflect a value adding activity, and the loss of such mandates corresponds to responsibilities being reassigned from a fully-fledged subsidiary. In order to explore what happens to subsidiaries that lose their mandates we make use of exploratory cases that centres on the interplay between the drivers of mandate loss and subsidiaries response ex-post mandate loss and observe that subsidiaries regularly survive and prosper post mandate loss. This allows us to elucidate how a subsidiary can exhibit a positive evolutionary trajectory ex-post mandate loss. We make two distinct contributions. First, we find that the redeployment of a subsidiary’s combining capabilities and slack resources are beneficial for subsidiary evolution post mandate lost. Second, we evidence that mandates and roles are can no longer be posited as aggregate, but instead are multi-dimensional, modular and bundled under a charter.