Subsidiary strategy processes in Latin America

Abstract

Purpose

The purpose of this paper is to discuss how network relationships, with business as well as with non-business actors, affect each other and have an impact on strategy processes in subsidiaries in Latin America.

Design/methodology/approach

A qualitative approach is used in which a new strategy in a European multinational company (MNC) is studied at the subsidiary level in Brazil and Argentina. The authors discuss why the strategic processes are so different within the same MNC. During 2009-2011, 50 interviews were conducted with respondents in Latin America and at headquarters.

Findings

The results point to the importance of including relationships with both business and non-business actors to understand the subsidiary strategy processes. The authors suggest that such processes can be explained by interdependent relationships in a wider network context characterised by commitment and trust, leading to increased legitimacy among the actors involved.

Practical implications

Managers need to invest in relationships not only with business counterparts but also with non-business actors, as they are interdependent and vital for the strategy development.

Originality/value

Relationships between firms and actors such as governments and civil society are still under-researched, although they are essential, especially in emerging economies. The paper puts focus on network relationships in strategy research and contributes to the development of business network theory by extending the network to also include relationships with such non-business actors and relate it to strategy processes. There is also a contribution to research on corporate social responsibility activities with a specific focus on Latin America.

Citation

Ljung, A. and Pahlberg, C. (2015), "Subsidiary strategy processes in Latin America", European Business Review, Vol. 27 No. 5, pp. 535-550. https://doi.org/10.1108/EBR-04-2013-0074