Globalization, Corporate Restructuring and Influences on the MNC Subsidiary

Abstract

There has been considerable interest in and research on the evolution and development of subsidiaries of multinational corporations (MNCs). It seems that the greatest influence on subsidiaries’ operations is likely to continue to be exerted by their parent MNCs. Indeed, the widespread corporate restructuring that is currently taking place, associated chiefly with globalization and the information technology revolution, will strengthen MNC centralization and top-down influences. There have been relatively few studies of this issue to date, although it clearly has important implications for our understanding of the engines of subsidiary change and restructuring, and of the relationship between corporate and subsidiary strategies, and ultimately for host government policy. This chapter draws on in-depth interviews with representatives of a sample of manufacturing subsidiaries in Scotland in order to explore (1) the major influences on and features of MNC corporate restructuring in the recent past, (2) the relationship between parent and subsidiary-level restructuring and (3) the extent and characteristics of subsidiary restructuring.