Strategic development of-the multinational subsidiary through subsidiary initiative-taking

The view that subsidiary managers should be active in taking strategic init iatives beyond their mandate is challenging the traditional hierarchical vi ew that MNC subsidiaries' roles should be tightly controlled. MNC subsidiar ies operate in three markets-local, global and internal-and take initiative s in these markets which may develop, consolidate or defend their existing position. Their development initiatives need to add value to the parent org anization and can lead over time to a strengthening of the subsidiary's con tribution to and strategic significance within the corporation, although an y such gains can also be lost. This article presents an eight-stage develop ment model for MNC subsidiaries. Corporations will gain from encouraging in itiative-taking in subsidiaries as this will allow full exploitation of the company's capabilities in increasingly decentralized multinationals. Subsi diary managers need to change their mindset from one of compliance to head office to proactive initiative-taking if they are to maximize their subsidi ary's value to the parent corporation. (C) 2000 Elsevier Science Ltd. All r ights reserved.