MULTINATIONAL SUBSIDIARY EVOLUTION - CAPABILITY AND CHARTER CHANGE INFOREIGN-OWNED SUBSIDIARY COMPANIES

In this article we develop a model of subsidiary evolution to shed lig ht on the processes that drive changes in a subsidiary's activities an d its underlying capabilities. We see subsidiary evolution as (1) the enhancement/depletion of capabilities in the subsidiary. coupled with (2) an explicit change in the subsidiary's charter. Building on, this definition, we analyze the interaction between capability and charter change and identify five generic subsidiary evolution processes, devel oping propositions around the underlying drivers for each process.