#4934. The enduring effects of relational attributes on subsidiary evolution after mandate loss

July 2026publication date
Proposal available till 02-06-2025
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Journal’s subject area:
Strategy and Management;
Business and International Management;
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Abstract:
We explore the importance of the relational attributes, trust and commitment, and their association with subsidiary development after mandate loss. We examine how greenfield and acquired subsidiaries, through their interaction with headquarters and sister subsidiaries, develop relational attributes through mutual-orientated adoption. We trail this process through a longitudinal field study following the evolution of four multinational enterprise (MNE) subsidiaries. The study shows how these relational attributes mitigate and compensate for formal mandate loss. Subsidiaries have been increasingly seen as the locomotive of MNEs value creation. This has coincided with the disaggregation of the MNEs value chain which has had a positive effect on the development of foreign subsidiaries. However, there is now more competition for responsibilities among subsidiaries leading to increased movement of responsibilities and activities between them. By showing the impact of managerial micro-activities in the MNE, our study offers insights for subsidiary managers on what they can leverage to pursue subsidiary charter consolidating activities and survival, or charter enhancing activities and growth.
Keywords:
mandate loss; relational attributes; subsidiary charter; systematic combining

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