A QCA Crisp set study in matching Cross Managerial Alignment with ERP implementation outcome, leading or misleading subsidiary-innovations

Qualitative Comparative Analysis (QCA) is the most important methodological innovation in management and social science in the last two decades (Fiss et al., 2016). This paper attempts to use this innovative research method to study innovation in a Parent-Subsidiary ERP implementation project. A Crisp set QCA study is used to study 18 company-wide system projects in subsidiaries of a Multinational Enterprise (MNE). The generic applications of the innovation projects enabled the study to have a common denominator to gauge the innovation resulting in a variance of planned and actual completion dates. Although the data collected was from a completed projects log, the study took a subsidiary-innovation approach to measure the managerial alignments and the possible application of agency theory. Keywords: Subsidiary innovation, Parent-Subsidiary relations, Agency theory

The roles of external embeddedness and institutional distance in the subsidiary product/process innovation and R&D capacity

Purpose This study aims to look at the relationship of external embeddedness and institutional distance (governance aspects) with the foreign subsidiary research and development (R&D) capacity. Furthermore, it examines whether these relationships are mediated by subsidiary product and process innovation, and whether institutional distance plays a moderating role in the relationship between subsidiary innovation and R&D capacity. Design/methodology/approach The authors draw on survey data from 130 foreign subsidiaries operating in Brazil and test their model using variance-based structural equation modeling. Findings Results suggest that subsidiary (product and process) innovation fully mediates the relationships between: subsidiary external embeddedness and R&D capacity; and institutional distance and subsidiary R&D capacity, such that the relationship is positive in case of the former and negative in case of the latter. The relationship between subsidiary product and process innovation and R&D capacity is positive and stronger at lower levels of institutional distance. Originality/value The research ignores the underlying mechanisms of the external embeddedness and institutional distance relationship with subsidiary R&D capacity. Furthermore, institutional distance based on formal governance aspects and their impacts on subsidiary innovation and R&D capacity are rarely investigated. This paper contributes with regard to these aspects.

Exploitation versus exploration

Purpose This paper aims to draw on the network perspective of organizational innovation to present an argument on how a subsidiary should select innovation behavior. Design/methodology/approach In this framework, the paper analyzes middle- and high-level managers of subsidiaries from various industries located in the Chinese Mainland. Findings The results suggest the following ideas: internal embeddedness is positively related to exploitation innovation, external embeddedness is inverted-U related to exploration innovation, the availability of alternatives positively moderates the main effects, whereas restraint in the use of power negatively moderates them. Research limitations/implications The current study has a few limitations that provide meaningful research directions for future investigations. First, it only considers the industry and ownership as control variables. Second, this study was conducted in the Chinese context. Practical implications The analysis of the relationship between embeddedness and innovation behavior also shows that focal subsidiary must dynamically adjust the way of embeddedness on the basis of its strategy, and it can reasonable leverage strategic assets for exploitation innovation or exploration innovation. From the perspective of headquarters, establishing deep embeddedness with a subsidiary and giving it indispensable support are important to promote that subsidiary’s exploitation innovation. Social implications The focal subsidiary should establish relationships with more alternative partners and develop relationships with power-advantaged partners through strategies such as a long-term contract, establishing an R&D alliance and entering a joint venture. Besides this, more powerful partners in the internal network should adopt various power usage strategies to promote focal subsidiary exploitation innovation and more powerful partners in the external network should show restraint in the use of power toward any subsidiary in an over-embedded situation. The result shows environment dynamism affects subsidiary exploration innovation more deeply than exploitation innovation. Consequently, managers should recognize the importance of dynamic adaptation to environmental changes and adjust their firms’ innovation behavior accordingly, especially when they are implementing an exploration innovation strategy. Originality/value The extent of embeddedness in an innovation network shapes the subsidiary innovation behavior, and this effect is moderated by power. The focal subsidiary should dynamically and strategically adjust its innovation behavior considering various its type and level of embeddedness.

Subsidiary Innovation in a Developing Economy: Towards a Comprehensive Model and Directions for Future Research

With the internationalization of innovation, multinational enterprise (MNE) subsidiaries have been found to play a critical role in product and process innovation. Deriving from a rich and diverse subsidiary innovation (SI) literature, this article attempts to develop a comprehensive model to study the factors that impact SI in a developing economy by devising three macro constructs, namely, (a) local environment (LE), (b) subsidiary traits (ST) and (c) headquarters (HQ) strategy (HS). The 15 factors associated with these macro constructs identified through literature review are statistically validated through an ‘Idea Engineering’ exercise for their contextual relevance. Based on an expert survey carried out in the developing economy context of India, barring 2 HS factors, rest of them have been found to be statistically significant in the Indian context. Antecedents of SI, identified by this article, can be used by domain practitioners and experts in the field to improve their organization’s innovative capability. The proposed model in this study can be further empirically validated by researchers working in the area of SI.