Subsidary autonomy strengthens multinational eterprises' resilience in times of global crises
Tensions between control and autonomy in multinational enterprises (MNEs) have attracted considerable academic interest, which has been additionally fuelled by multiple crises following the 2008 global recession. These have intensified the exploration of interentity relationships within MNEs and their implications for risk and crisis management and resilience.
Prof. Dr. Andreja Jaklič, Assist. Dr. Iris Koleša, Assist. Gaja Mavri and Assoc. Prof. Dr. Anže Burger (from Centre of International Relations) in study on the autonomy of subsidiaries as part of the crisis management strategy of multinational companies in times of global crises examine the importance of adjusting the management of relations between subsidiaries and headquarters in a multinational enterprise during global crises such as pandemics or wars. They analyse the performance of foreign subsidiaries during the global crises of the Covid-19 pandemic and the war in Ukraine (2019–2022) with a particular focus on the impact of centralisation tendencies in the home country of the multinational enterprise’s headquarters on subsidiaries’ growth as well as their risk and crisis management responses.
Their study shows that subsidiary autonomy as part of the multinational enterprise's crisis management strategy in Central and Eastern Europe plays an important role in the resilience of subsidiaries and multinational enterprises as a whole – even if this is predominantly focused on subsidiaries’ domestic markets during crises. Subsidiary autonomy can also foster subsidiary initiatives aimed at the search for new markets outside their region. It can moreover protect the subsidiary from the effects of a crisis in the home country of its headquarters to some extent and is thus advisable especially when the latter is heavily hit. However, subsidiary autonomy in itself does not guarantee successful risk and crisis management but rather needs to be complemented by other measures (e.g. those aimed at cost optimisation, competence development, product, service and process innovation, networking etc.).
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Back to list of notificationsPublished: 12. December 2024 | Category: Research