Configuring an MNE’s subsidiary capabilities for performance in China
Abstract
Purpose
This study aims to explore how subsidiary capabilities collectively configure for performance. Additionally, it seeks to examine whether these configurations of capabilities can provide equifinal solutions through developing a comprehensive research framework that focuses on subsidiaries in China.
Design/methodology/approach
With a data set collected through a questionnaire from 172 Korean multinational enterprises (MNEs) in China, this study used a fuzzy-set qualitative comparative analysis to detect the capability conditions and configurations. These configurations represent combinations of various subsidiary capabilities linked to high performance.
Findings
This study identified several complex pathways with distinct configurations for high subsidiary performance. The findings demonstrate the importance of configurations over individual conditions. Thus, the results highlight that the effectiveness of diverse capabilities, which are widely believed to singularly contribute to the high performance of MNE subsidiaries, depends on how each combines with other capabilities. Overall, the findings provide a richer and fine-grained understanding of the role and relative importance of various forms of MNE subsidiary capabilities and how the joint effect of these subsidiaries contributes to high performance.
Practical implications
This study suggests that MNE managers should comprehensively understand how subsidiary capabilities are configured to produce subsidiary performance outcomes. This specifically illustrates the importance of understanding the mutually conflicting yet collectively exhaustive results of multi-selective solutions and aims to align with China’s industrial and regional heterogeneity.
Originality/value
By examining the role of MNE subsidiary capability configurations, which may collectively influence the subsidiary’s performance, this study contributes to the literature. It elucidates how MNE subsidiaries may achieve superior performance by developing and possessing various capabilities tailored to the local context.
Keywords
Acknowledgements
This work was supported by the Hanyang University Research Fund and Sookmyung Women’s University Research Grants. This work was partially supported by Hankuk University of Foreign Studies Research Funds.
Data availability statements: Data available on request from the authors.
Funding: This research received no external funding.
Conflicts of interest: The authors declare no conflict of interest.
Citation
Roh, T., Park, B.I. and Xiao, S.(S). (2024), "Configuring an MNE’s subsidiary capabilities for performance in China", Chinese Management Studies, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/CMS-04-2022-0132
Publisher
:Emerald Publishing Limited
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