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Cooperation of Russian manufacturing subsidiaries of multinational corporations with foreign sister-subsidiaries

Priority areas of development: management
2015
Department: Laboratory of Corporate Strategies, Organizational Structures, and Management Innovations
The project has been carried out as part of the HSE Program of Fundamental Studies.

Object of study – Russian manufacturing subsidiaries of foreign multinational corporations (MNCs).

Goals of the study:

  • to depict practices of companies from developed countries transplanted into emerging economies;
  • to describe how multiple interconnected problems are solved during project launch and implementation;
  • to increase knowledge about strategic aspects of MNCs’ activities in Russia.

Empirical base  – interview with ythe head of Russian manufacturing subsidiaries, survey of plant managers. The plants belong to 45 multinational corporation with total global sales in 2014 US$ 450 bln. And total manufacturing output of their Russian plants – above Ruble 1 trln.

Results

Russian manufacturing subsidiaries of international corporations are the integral part of the internal networks of resource allocation. The absolute majority (90%) of the surveyed heads of Russian industrial plants that belong to multinational corporations confirmed that they receive “significant” support from their parent companies. In addition, more than 60% of the surveyed heads of Russian industrial plants that belong to multinational corporations confirmed intensive cooperation with foreign “sister-subsidiaries”. Intensity of cooperation depends on the total length of inclusion of a subsidiary into the parent company – the longer the subsidiary belongs to the parent, the higher is the intensity of cooperation with sister-subsidiaries. Cooperation with sister-subsidiaries positively correlates with two important measure of robustness of subsidiary operations – “reliability of supplies” and especially “the level of technological culture and discipline”. “Reliability of supplies” increases with intensification of cooperation in design of new products, “the level of technological culture and discipline” increases with intensification of cooperation in human resource management issues. “Reliability of supplies” and especially “the level of technological culture and discipline” can be sustainable competitive advantages in many markets and industries and lead to positive effects on subsidiary performance.

The level of novelty of the results - high .

The area of application of the results – Russian manufacturing subsidiaries of multinational corporations that can use the results to optimize their relationship with foreign sister-subsidiaries.

 

Publications:


Gurkov I. B. “Communications between Manufacturing Units of Multinational Corporations”, Series: Management WP BRP 38/MAN/2015 / NRU Higher School of Economics. Series MAN "Management". 2015. No. 38.
Progress in International Business Research Vol. 10: The Future of Global Organizing. Emerald Group Publishing Limited, 2015.
Gurkov I. B. Corporate parenting style of the multinational corporation - A subsidiary view // Progress in International Business Research. 2015. Vol. 10. P. 57-78. doi