This paper undertakes an exploratory study into the characteristics of entrepreneurial culture of the multinational subsidiary; and, into the associated influences and manifestations linked to multinational corporation (MNC) and environmental contexts. The theme of multinational subsidiary entrepreneurial culture is an unexplored theme in the literature, and has considerable research and managerial significance. This qualitative research is based on eight multinational subsidiaries in the advertising sector in the UK. The evidence suggests that the constituents of multinational subsidiary entrepreneurial culture include global vision, entrepreneurial orientation and entrepreneurial MNC network management. The related influences and manifestations refer to subsidiary autonomy, target market servicing and responsiveness to local environmental conditions. In addition, the findings show that while entrepreneurial behaviour was evident in all investigated subsidiaries, its locus varied significantly. Specifically, entrepreneurship in multinational subsidiaries can be subsidiary-, headquarters-, or jointly-driven.
The aim of this paper is to enhance our understanding of entrepreneurship in the subsidiary of the multinational corporation (MNC) through a qualitative, exploratory research in the advertising and marketing communications (hereafter “advertising”) UK sector. Such a research has significant theoretical interest. Analytically, the study of entrepreneurship in the multinational subsidiary is at a relatively early stage of development. The literature on international entrepreneurship, on the one hand; and, that approaching the MNC as an enterprise comprising an interorganizational network of dispersed and differentiated relationships, on the other, have been offering useful insights for some time. Both these research streams can be very valuable to the investigated issue of entrepreneurship in multinational subsidiaries, which can be viewed as lying on the interface of the two areas.
In the international entrepreneurship field, it is found that global vision of the entrepreneur and the entrepreneurial team in independently owned firms is key to enhanced performance of the firm in the international market (Autio, 2005; Madsen & Servais, 1997). These entrepreneurial firms often employ alliances in order to overcome resource constraints when they internationalize (Brush, 1995; Oviatt & McDougall, 1995). In the MNC field, it is recognized that subsidiaries may not be merely subordinate elements of their parent MNCs. Instead they can be examined as networks of autonomous and differentiated units (Bartlett & Ghoshal, 1989; Harzing, 1999; O’Donnell, 2000). Therefore, combining these ideas from the two areas, one can argue that multinational subsidiaries, when managed by individuals possessing a global vision and an ability to efficiently network with other MNC units, may achieve success through their entrepreneurial behaviour. Such an idea is to some extent examined primarily in the work of Birkinshaw and his colleagues (Birkinshaw (1997) and Birkinshaw (2000); Birkinshaw, Hood, & Jonsson, 1998; Birkinshaw, Hood, & Young, 2005), who note that subsidiaries can contribute to innovative and entrepreneurial activities in MNCs.
The evidence from this research suggests that multinational subsidiary entrepreneurial culture is the overarching mechanism towards initiation and energization of entrepreneurial behaviour in the examined subsidiaries. In addition, the evidence shows that there are three main characteristics of multinational subsidiary entrepreneurial culture, which are:
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Global vision. This refers to the global mental model as well as the strategic behaviour of the organization (Autio, 2005; McDougall et al., 1994).
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Entrepreneurial orientation. It is linked to the innovative, proactive and risk-taking activity within the organization (McDougall & Oviatt, 2000; Dimitratos & Plakoyiannaki, 2003).
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Entrepreneurial MNC network management. This derives from the notion of the MNC as an interorganizational network (Ghoshal & Bartlett, 1990; Grant, 1996). It refers to knowledge sharing, team working and learning within the MNC network.
Moreover, the evidence from this research suggests that there are three influences and manifestations, which concurrently impact on and are affected by the multinational subsidiary entrepreneurial culture. These are:
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Subsidiary autonomy. This relates to the freedom of the subsidiary to proactively initiate, undertake and manage subsidiary entrepreneurship relative to the extent of control exercised by the MNC parent (Burgelmann, 1983; Paterson & Brock, 2002). Research on multinational subsidiaries generally suggests that autonomy has a positive effect on subsidiary innovative activities (e.g. Venaik, Midgley, & Devinney, 2005). However, the evidence of the present study indicates that autonomy is a necessary but not sufficient condition for subsidiary entrepreneurship to appear (in line with the assertion by Young and Tavares, 2004).
