responsiveness in mncs

8/12/2019 Responsiveness in MNCs

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An Evaluation of the Integration-Responsiveness Framework: MNC Manufacturing Subsidiariesin the UKAuthor(s): James H. TaggartReviewed work(s):Source: MIR: Management International Review, Vol. 37, No. 4 (4th Quarter, 1997), pp. 295-318Published by: SpringerStable URL: http://www.jstor.org/stable/40228410.

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mlr vol.37, 1997/4,p.295-318 mirIIIoiINIINHNII ItuVWW Gabler Verlag 1997

James H. TaggartAnEvaluation ofthe Integration-responsiveness Framework:MNCManufacturingubsidiaries inthe UKAbstractThis tudys an evaluation f hentegration-responsivenessrameworkt sub-sidiaryevelusing atafrom sample f 171manufacturingubsidiariesffor-eignMNCs ntheUK. Inparticular,t eeks oreview he hree-wayaxonomyevolved yJarillond Martinez1990) ina study fmanufacturingubsidiar-ies inSpain.

Key ResultsA four-groupaxonomymerges romheanalysis,ncluding low integra-tion/lowesponsivenesslassification,otdescribed yJarillo ndMartinez.A number f structuralndoperationalariables reanalysed cross hefourgroupsfaffiliates,uggestinghat heproposedaxonomyswelldefined ndinternallyonsistent.

AuthorJames .Taggart,enior ecturern nternationalusiness trategy,trathclydenternationalusi-nessUnit, epartmentfMarketing,niversityfStrathclyde,lasgow, cotland, K.ManuscripteceivedMarch 996, evised uly 996, evisedeptember996, evised anuary997mirvol.37, 1997/4 295

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James H. TaggartThe integration-responsivenessaradigm asproven o be a robust rameworkboth or escribingndanalysinghe trategiesf nternationalirms tcorpo-rate ndsubsidiaryevel. t owes itsdevelopmento Prahalad1975) and Doz(1976) individually,nd ointly1987). It has become ne of themost ominantof nternationaltrategy odels,ndhasbeen ubject ovigorous mpiricalval-uation y, mong thers, arillo nd Martinez1990),Roth nd Morrison1990)and Johnson1995). The frameworkisualises trategys being volved n twodimensions:ntegrationf activitiess the nternationalirm's esponseopres-sures o reduce verall osts ndmaximise eturnhroughxploitinghemarketsimperfectionsnherentn themultilocationspect f the perations;marketndregulatoryorcesn tsmanyocations equireshefirm o attenuateherigoursofstandardisationnd/oro-ordinations necessary,nd thus ecomemore o-callyresponsive.y adjustingtsposition longthese wodimensionss envi-ronmentalactorshange, he nternationalirmttemptso create nd sustaincompetitivedvantage.Thepurpose f this tudys tocarryut critical ssessmentf the ntegra-tion-responsivenessrameworkhich as a role nclassifyinglternativenter-national trategiesnd is also a meansofallowingmultinationalorporations(MNCs) toadjust heir ositioninglong he wodimensionss a means fcom-peting ffectivelyith ther nternationallayers.nparticular,hispaperwillcarryutan evaluation nd extension f thederivedmodel fJarillo nd Marti-nez 1990) as itappliesparticularlyo MNCmanufacturingubsidiaries. o thisend, he tudy ses a database eveloped rom sample fMNCaffiliatesntheUK. Interms f Roth ndMorrison's1990) methodologicallassification,hisis a medium-grained nalysis s opposedto the finegrained ase studyapproach r the course-grained se ofextremelyargedatabases ike COM-PUSTAT or PIMS. This methodologicalpproachs adoptedwith view tocomparisons ith ther imilar tudies, o make this tudy eneralisablendreplicable,nd to attempto developthemethodologyn someparticulare-spects.

ConceptsWith uerespecto the ational,inear iewofstrategysee,for xample, haffe1985) andsynopticmodels Frederickson983),the earch or n appropriateinternationaltrategys likely o bemore luid,hought s unlikelyoresembleclosely he emergent oncept fMintzbergndWaters1985) ortheparallelnotion fQuinn 1980). ContingencyheoryHofer/Schendel978,Ginsberg/Venkatraman985)tells sthattheresno onebestway , nd he onstantuest296 mirvol.37, 1997/4



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Evaluation of the ntegration-responsivenessrameworkof MNC managersofit trategyo situation nderlies numberf theoreticalapproaches.t drives orter's1986) configuration/co-ordinationaradigm,t scharacteristicf White ndPoynter's1984) modelof subsidiary trategy,trelates o BartlettndGhoshal's1989)multinational-global-international-trans-nationalypology,nd t nformshe oncept f the nternationalierarchicirmdeveloped yHedlund1986) and Hedlund nd Rolander1990). It has stronglinks, oo,with he ntegration-responsivenessridwhich ttemptsocaptureheinternationalanager'sonstantearch or he ptimal alance feconomies fscale andeconomies fscope.The Integration-Responsiveness FrameworkThebuildinglocks fthe rahalandndDoz (1987)model throughhichheyclaim o offer manageriallyeaningful ethodfcapturinghekey haracter-istics fMNC activity areglobal ntegrationfactivities,lobalstrategico-ordination,nd ocalresponsiveness.edlund1981)wasamong he irstorec-ognise hekey oleof ntegration,articularlyhen elatedothedegree f sub-sidiaryutonomy.ntegrationlays key artn nternationalarketingHitt/Ire-land 1987),especiallyn managingustomerelationships,egmentationndphysical roduct esign Takeuchi/Porter986). Ghoshal ndBartlett1988)found positive elationshipetweennnovativeapabilityndnormativente-grationfparentnd ubsidiary.orKobrin1991), ntegrationsoperationalisedas flows fresourcesetween arentnd ubsidiariesndbetweenhe ubsidiar-ies themselves. artinezndJarillo1991)exploredhe elationshipetweenn-tegrationnddifferentiation,ndconcludedhatevelof ntegrations correlatedwith hedegree f co-ordinativectivity ithinheMNC. In a recenttudy fGermanubsidiaries, elge 1994) identifiedntegrations the ask-orientede-sultantf o-ordinationnd onflictesolution;his inkagesmadefromhe er-spectiveforganisationheory,et ffersn nterestingnsightn the ontextfthis aper.While eontiades1986)correctlydentifiedo-ordinationfglobal esourcesas essential o successfulMNC strategy,hefirst igorousnalysiswas that fPorter1986).He definedo-ordinationn termsfthe inkages etweenimilaractivitiesn differentountriesnd/orifferentarts ftheMNC's internationalnetwork.erecognisedhatt llowsfor ccumulationnd haringfknowledgeacross henetwork,thelps heMNC togain nternationalconomies fscale,andalso allows t toshiftomparativedvantage etweenountries heret slocated. heconceptsalsorecognisednspecificnternationalunctions: anu-facturingAgthe1990),marketingKashani1990),andR & D (Dorrenbacher/Wortman991).Further,o-ordinations manifestnthe ressureor onsistencywithinheMNC Rosenzweig/Singh991) nd re resultantf tangibleystemmirvol.37, 1997/4 297



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JamesH. Taggartof proceduralusticebetween arent nd subsidiaryKim/Mauborgne991).Finally, s noted bove,Martinez nd Jarillo1991) identified relationshipbetweeenntegrationndco-ordination,findinghatwas confirmednpassantbyRoth ndMorrison1992).Bartlett1981) emphasisedhe mportancefnational esponsivenessn asituation frapid nternationalrowth,ndthishas been confirmedime ndagain n the iteraturee.g.White ndPoynter984,Agathe 990,Taylor 991).Accordingo Leontiades1986), ocalresponsiveness aybe so welldevelopedthat tentirelyifferentiatesubsidiarytrategyrom hat f theparent. artlettandGhoshal1986)makemuch he amepoint, utwith differentmphasis;ncertainases,corporateurvivalmaydepend nproactive evelopmentf suchdifferentiatingocal responsivenessn international & D, especially n anindustryikePharmaceuticalshere roductpecificationsarywidely ycoun-try. inally, gelhoff1988) identifieshekeyrole ofresponsivenessrom heperspectiveforganisationalheory,nd it has beenspecificallyescribed spressure or somorphismithin he ocal environmentRosenzweig/Singh1991).PrahaladndDoz (1987) identifyuite learpressuresorntegrationnd o-calresponsiveness,uthavemore ifficultyith heneed or o-ordination.heysuggest close ink etweenntegrationndco-ordination,ut ecognisehat o-callyresponsiveubsidiaries illalso require significantegree fco-ordina-tion.However,without urtheriscussion,hey roceed o theworkingssump-tion hat o-ordinations muchmore losely elated otheneedforntegration,andthese wobroadvariables rethen ombined s onedimensionfthemodel,with ocalresponsivenesseing he ther.his ssumptionassubsequentlyeenjustifiedyempiricaltudies.The overall rameworkas also been ubjectedosupportivempiricalest-ing,notably yRoth ndMorrison1990),andbyJohnson1995) whoconcen-trated n a single ndustry.oth onfirmedrahalandndDoz' originalrescrip-tionby dentifyinghree lusters fstrategyutcomes nthediagonalsee Fig-ure1) markinghehigh ntegration-lowesponsivenessolowintegration-highresponsivenessontinuum.Integration-Responsiveness at Subsidiary LevelTheframeworkasadapted lightlyyJarillondMartinez1990)for nempir-ical study f 50 Spanish ubsidiariesfmanufacturingNCs.Thismodel lsohas ntegrations thevertical imension,ut eplaces esponsivenessithocal-isation; he atters,however,perationalisedysixresponsiveness-typeari-ables. Whileacceptinghat ubsidiariesould, ntheory,e located nall fourquadrantsf theirmodel, he uthorsosit nly hreelassificationsnthe trat-298 mirvol.37, 1997/4



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Evaluation fthe ntegration-responsivenessrameworkFigure1. The ntegration-Responsivenessrid

NeedforResponsivenessLow High

High Integratedroducttrategy,world-wideusinessmanagement

ProductmphasisNeed forIntegration Multifocalstrategy

Areaemphasis

Locally esponsivetrategy,autonomous ationalLow subsidiaries

egy pace:active ubsidiariesrehighlyntegratedndhighly esponsive,uton-omous ubsidiariesrehighly esponsiveuthave ow ntegration,hile ecep-tive ubsidiaries ave owresponsivenessut rehighlyntegratedseeFigure ).Analysisfthe ample id, nfact,dentifyhree lusters ffirmshatorrespondbroadlyothe roposedoles o,as well sconfirminghe iagonal trategypacehypothesisedyPrahalad ndDoz, the oprightorner fthemodelwas identi-fiedbyan additional lassification.Morerecently,studyf 102 GermanmanufacturingubsidiariesocatedntheBritishsles supportedheview thatntegrations a key trategyimensionat his evel f heMNC,and dentifiedwomutuallyrthogonalimensionsTag-gart/Hood995).These redecision-makingutonomyf he ubsidiaryndmar-ket cope.While tmaybe argued hat hese woparametersould be closelylinked o ocalresponsiveness,t must e rememberedhat heyre, nfact,mu-tually rthogonalndwould hereforeot esolve n to one resultantimension,whethertbe localresponsivenessr otherwise. urthervidence omesfrommirvol.37, 1997/4 299



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James . TaggartFigure2. Integration-Localisationramework

DegreeofLocalisationLow HighHigh Receptive ActiveSubsidiary Subsidiary

DegreeofIntegration

AutonomousLow Subsidiary

studyTaggart 996b) for123 multinationalanufacturingubsidiariesocatedinScotlandnwhich hekeydeterminantserefound o be marketcope,co-ordinationnd ntegration;ecision-makingutonomynd ocalsupply inkageswere lso identifieds important.

Research QuestionsFrom hediscussion bove andanexaminationfFigure , t s immediatelyb-vious hat nunexplained apoccurs nthe trategypace, orrespondingo owintegrationnd owresponsiveness;or s thereny xplanationrdiscussion fthis ap nanyof thepapers ited bove. Bartlettnd Ghoshal1986) proposeroleComplementer )or ubsidiaries ith lower evelofcompetenceperatingwithin market hat as lowstrategicmportanceor heparentorporation;t300 mlrvol.37, 1997/4



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Evaluation f the ntegration-responsivenessrameworkcouldbearguedhatow ntegrationould ccurn uch nenvironment,nd hatlowresponsiveness aywellbe oneconsequence f lower ubsidiaryompe-tence. artlett1986) identifiedhreeorporatetrategiesglobal,multinational,transnational)n three f the four uadrantsf the ntegration-responsivenessframework;ater, artlettnd Ghoshal 1989) indicated fourth ariant theinternationalirm which, y mplication,iesinthefourthuadrantlowinte-gration,owresponsiveness)),houghhey o not ay ospecifically.nstead,heyindicate hat ubsidiariesf nternationalirmsexploit arent ompany nowl-edgeandcapabilities hrough orldwide iffusionndadaptation .espite hisindirectvidence, owever,hegap n the trategypace nFigure has notbeenfully valuated reviouslyn distinct erms fintegrationndresponsiveness,most articularlyith espectoJarillondMartinez1990)whofocusedpecif-ically nstrategynsubsidiaryevel.There eemsnoprima aciereasonwhy nMNCsubsidiaryhould ot dopt low ntegration-lowesponsivenesstrategy,eitherro-activelyr duetonegligencenthepart ftheparentorporation.n-deed,Bartlett1986) suggestshatMNCs in the ementndustry aywellpro-activityocate hemajorityf theirubsidiariesn this ower eft orners theyhave little ncentiveobuildglobalscaleplants uetologistical arriers,ndlimitedbilityo differentiteheproductroperationsationallyueto thema-tureommodityaturefthe usiness . owever,t hould ebornen mind hatthis esearchsfocused nevaluatingndextendinghederivedmodel fJarilloandMartinez1990); thus,we arrivetthe irstrincipalesearchuestionRQ)addressed ere:RQ1: Arethereubsidiariesocatedn the ow ntegrationlow ocalrespon-siveness trategypace?For he akeof dentificationnthe ollowingiscussionhis trategyolewillbelabelled quiescentubsidiary .

Whilemultivariatenalyticalechniquessing hentegrationndresponsive-ness onstructs ayyield classificationf ubsidiaries,twould erash odrawconclusionsnthisbasisalone. thas beenstronglydvocatedn the iteraturethatlternativeariablesreused o test hevalidityfany uchderivedlassifi-cation;n ddition,his llows richernterpretationf he esultsHarrigan983,Venkatraman/Grant986,Morrison 990,Roth/Morrison992).A summaryfthe ariables sedfor his urpose,ogetherith note f he upportingesearch,is given nFigure . Thus,the econdpurpose fthispaper s to evaluate heunderlyingaxonomyntermsf hese ariables,ndwehave he econd esearchquestion:RQ2: Does the ubsidiaryaxonomyerived rom he ntegration-responsive-ness frameworkifferentiatecrossthealternativeariables n somesystematic anner?mirvol.37, 1997/4 301



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James . TaggartFigure3. Alternativeariables

Variable SupportingResearch PresumptiveRelationshipsAgeof ubsidiary Wells 1972) Activeubsidiariesldest,WhitendPoynter1984) quiescentoungest,eceptivendYoung t al. 1 88) autonomousntermediate.Taggart1996a)Taggart1996b)Size (employment,ales) White ndPoynter1984) Active ubsidiariesargest,Young t al. 1 88) quiescentmallest,eceptivendRoth ndMorrison1990) autonomousntermediate.Taggart1996b)Export ropensity StopfordndDunning1 83) Active ndreceptiveubsidiariesWhite ndPoynter1984) havehigherxportropensityDunning1985) thanutonomousndquiescent.StopfordndTurner1985)Roth ndMorrison1992)Marketcope Rumelt 1 74) ActivendreceptiveubsidiariesWhite ndPoynter1 84) havehighermarketcope hanYoung t al. 1 88) autonomousndquiescent.Roth ndMorrison1990)Material utputso sister White ndPoynter1 84) Activeubsidiariesend argestsubsidiaries Young tal. 1 88) proportion,uiescentmallest,Kobrin 1 91 receptivend utonomousRoth tal.( 1991) intermediate.Proportionf ales manufactured White ndPoynter1984) Autonomousubsidiariesin-house JarillondMartinez1 90) manufactureighest roportion,MartinezndJarillo1 9 1 receptiveeast, ctive ndRoth ndMorrison1992) quiescentntermediate.Materialnputs romister White ndPoynter1984) Activeubsidiarieseceiveargestsubsidiaries Young t al. 1988) proportion,uiescentmallest,Egelhoff1 88) receptivend utonomousJarillondMartinez1990) intermediate.Levelofproductionperations Miles andSnow 1 78) QuiescentubsidiariesavePorter1980) highestevel, ctive owest,WhitendPoynter1 84) autonomousndreceptiveYoung t al. 1 88) intermediate.Roth nd Morrison1990,1992)1 Taggart1996b) |

MethodologySampleFromJordan'sistingf US andother oreign-ownedanufacturingirmsntheUK,a sample f500 was drawn trandom. postal uestionnaireas sent otheChief xecutive fthese ubsidiaries.verall, 79questionnairesere eturned;ofthese, 7 were eturnedythepostal ervicemarkedgone way , nd61 re-sponseswere rom irmshatdentifiedhemselvessbeingnmanufacturinger-vices ratherhanmanufacturing.his eft total f 171 validresponses,epre-sentingn effectiveesponse ate f43.6%. Just verhalf fthe esponsesame302 mirvol.37, 1997/4



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Evaluation fthe ntegration-responsivenessrameworkTable 1. StructuralharacteristicsfRespondentirms

AverageYears ince Establishment 22.6Total ales ( million) 197.4TotalExports million) 74.1Number fEmployees 990

from hiefExecutives,3% from ther irectors,nd23% from ther xecu-tives.Eighty-fiveftherespondentirmswere ngagedn someform fengi-neering,1 inchemicals,nd58 spread ver thermanufacturinglassifications.Theykey haracteristicsf these irmsreshownn Table1MeasuresThe ntegrationndresponsivenessimensions ereoperationalisedysixandfivevariables espectively;heseweredrawn rom rahalad ndDoz (1987) andpre-testedith sub-samplef22 foreignubsidiariesor eliabilityndvalid-ity eforenclusionn thefinal uestionnaire.he six ntegrationariablesTa-ble2,variables 6) arefairlytandardndcallfor ittleomment.hefive e-sponsivenessariablesTable2,variables -11) originallysedbyPrahaladndDoz havenotbeenovertlyriticisedysubsequenteserachers,orhavetheybeenusedwithoutmodification.tmaybehelpful,herefore,ore-establishhelineofargumentn favourfusing hese articularariables omeasure here-sponsivenessonstruct.ariable concernshe eterogeneityf ustomers; herecustomereeds reclearlydentifiedndvaryittle etweenmarkets,here us-tomers avea clearperceptionfthevalueoftheproduct, here heir ecisionprocesses rewellestablishedndfamiliar,ndwheremarketrendsrewellde-fined,henheneed orocalresponsivenesss ow. nthe aseofvariable whichconcerns iffusionfcompetitiveharacteristics,ressuresorresponsivenesswillbelowwhen ompetitorsrefew n numberndeasily dentified,hen heirstrategiesanbedistinguishedndunderstood,ndwhen hey anberecognisedas sharingometypicalharacteristics.ariable relates otechnology,ndtheneedfor ocalresponsivenesss likely obe lowwhere omplexmanufacturingprocessesreused nconjunctionith table roductndmanufacturingechnol-ogy; nthis aseprocessmprovementsnd ostreductionre mportant;heneedforhigheresponsivenessill be reflectedn a rapidlyvolving echnologyc-companiedy unpredictablehangesnproductndprocess.With ariable 0,relatingothe conomics fmanufacturing,ressuresor esponsivenessillbereducedwhen lant izeandcapacity tilisationecome hekey spects fman-mirvol.37, 1997/4 303



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JamesH. Taggartufacturingost nd/or here ocationaldvantagesxist, articularlynthe ormoffactornputvailability.ariable 1 s concerned ith heheterogeneityftheexecutive roup,nd a highneedfor ocalresponsivenessillbe reflectednavariegatedmanagementeam hat s not onstrictedya uniformorporateul-ture peratinghroughoutheMNC; inthis ase,theexecutive roups muchmore ikely o respond apidly ndpositivelyo local market timuli ven f- lacking herequired egree fautonomy they ave to seek the o-operationofregionalrglobalHQ.Forthefull ample ffirms,heCronbachlpha cross hevariables n eachdimensions 0.88 forntegrationnd0.84 for esponsiveness;hese alues re n-dicative fmeasurementeliabilityRoth/Morrion990, 1992,Johnson995).All elevenvariablesweremeasured n a 5-point ikert-typecale. These vari-ables haveassumed quidistantntervalsndmaybe considerednterval-scaled(Martinez/Jarillo991). The two sets of variableswereaggregated y yieldmeandimensionalcoresfor achrespondentubsidiaryGhoshal nd Bartlett1988).The structuralariablesweremeasured s follows: ime lapsed ince stab-lishmentnyears, ales npounds terling,xportss a percentagefsales, ndemployeesn units. heoperationalharacteristicseremeasurednthree ays:first,espondentseregiven six-classificationhoice fmarketcope mainlyUK to world- ide ); econd, six-bandcale ofpercentagesas used omeas-ureoutputsnd nputso and from ther roup ubsidiaries,nd theproportionof saleswhollymanufacturedythe ubsidiary;hird,henature fproductionoperationswas measured y a 5-point ikert-typecale ( assembly nly tofully ledgedmanufacturing ).Data AnalysisAnalysiswas carried ut ntwostages.First, oevaluateRQ1,clusternalysiswas usedto nvestigatend dentifyhe nderlyingrouptructurefthe ample,based on the wo ggregatedimensionsf ntegrationndresponsiveness.hisis a commonpproachostrategytudies sedby, mong thers,ess andDavis(1984),Robinson nd Pearce 1988),Roth ndMorrison1990),Martinez ndJarillo1991) andJohnson1995). Then nanalysis fvariancewasconductedto assistwith he nterpretationf clusterharacteristics,houghhis annot eregardeds a test f statisticalignificancen thenormal ense s we aretestingfor ifferenceshatweknowmust xist. nthe econd tage fanalysis, NOVAand series fposthoc testswere arried utusing he tructuralndoperationalvariablesotest or ignificantifferencesetween he lusters;hiswasdesignedtoevaluteRQ2.Theappropriaterocedureere s Duncan'smultiple-rangeest(Roth/Morrison990).Contrastnalysis,rplanned omparisons,s analterna-304 mlrvol.37, 1997/4



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Evaluation f the ntegration-responsivenessrameworktive Johnson 995)but he osthocapproachspreferredere inceRQ2 is notwholly eterminant;hisminimises heriskof inflationfType1 errorevels(Hairetal. 1987,p. 283).

ResultsHaving redictedhe xistenceffour istinctlusters contraryoreceivedwis-dom Jarillo/Martinez990) - great are s needed o avoidtheself-fulfillingprophesyyndrome.ccordingly,oth ierarchicalndnon-hierarchialethodswere sed.Theformerndicatedhat four-clusterolution asappropriate;on-hierarchicallustering,ith tsprofusionfoutputtatistics,as used n confir-

Table2. Four-Clusterolution: luster nalysisIndustryariable Cluster Cluster Cluster Cluster F-value(n=45) (n=43) (n= 32) (n= 51)v.l. Manufacturingecisionsinked 1.60 1.88 3.06 2.73 17.03*to ocalorworld-wide arketreasv.2. Productndqualitypecifications 1.47 1.60 3.34 3.00 34.09*developed yHQ orsubsidiaryv.3. Extentowhichubsidiaryerves 1.82 1.88 3.59 3.24 27.17*itsMNC's customersorld-widev.4. Centralisationndsharing 1.87 2.09 3.38 3.45 26.90*oftechnologyevelopmentwithinhe nternaletworkv.5. Dependence fsubsidiaryn inkages 1.47 1.79 3.28 2.90 23.27*withinhe nternaletworkv.6. Centralisationfproductionlanning,1.00 1.16 2.03 1.55 13.15*inventoryndqualityontrolv.7. Heterogeneityfcustomers 1.51 2.49 2.72 1.55 26.92*andtheir eedsv.8. Extentowhich ompetitorsnd 1 76 3.00 3.09 1 67 23.68*theirtrategiesreeasily dentifedv.9. Stabilityftechnologynd evel 1.64 2.81 3.09 1.84 19.82*ofmanufacturingophisticationv.10. Life ycle tage fproductine 1.64 2.42 2.56 1.63 17.54*andmanufacturingrocessv. 1 Heterogeneityfexecutive roup 1 69 2.56 2.38 1 80 9.31** Significantt thep


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JamesH. Taggartmation. olutionsweredevelopedwith , 3, 4, 5,6 and 7 clusters,nd a evalua-tionmade f he roportionfbetween-groupsariance. hus, he wo-clustero-lution howed hat 2% of all variancewas dueto thebetween-groupslement,58% for he hree-clusterolution,0% for our-cluster,nd73.5% for ive lus-ters; hereafter,hisproportionncreased ery lowly.As a broadparallel oCattell's1966) scree est or xtractinghe ppropriateumberffactorsn fac-tor nalysis,his onfirmedhat hefour-clusterolutionwasappropriate. Thissolution alls lmost reciselyn themiddle fthe ange /50 o n/30 onsideredto beacceptableRoth/Morrison990).Variablemeans or ach ofthe our lus-ters reshown n Table2.

Finally,heresearchuestions re constructedn theassumptionhat if-ferences etween he lusters eflectifferencesnstrategys prescribedytheintegration-responsivenessrameworkatherhanmerelyndicatingifferencesbasedon ndustry embershipnd/orndustryerspective.he clusters ere x-amined or hisndustry-specificffectnd twas found hat he roportionfre-spondentsrom he hree roadndustryroupingsescribed arlier idnotvarysignificantlymongthe fourclusters differencemong k-proportions,hi-square 9.54,df=6, p=0.13). Thus we can be more onfidenthat ifferencesbetween he our lustersre trategy-related.able 3gives summaryf harac-teristicsf thefour lusters fsubsidiaries,dding o the vidence f a positiveresponseoRQLBeforemovingo thenext tage f nalysis,t hould e noted hat he esultsso far uggest strong ositive esponseoRQL This s not tallconsistent iththe ategorisationutforwardyJarillo ndMartinez,nthat here s firm vi-denceof a non-industry-specificluster f 45 firms or 26% ofthe ample inthe ow integration/lowesponsivenesstrategypace,not discussed n theirmodel.This s an interestinginding,s Jarillond Martinez idfocus pecifi-callyonMNCmanufacturingubsidiaries,lbeit ocatednSpain.The second tage fthe nalysisnvolvedarryingutANOVAonthe etoffour tructuralariables,nordero estwhetherhenew rameworkerivedbove(andconfirmedytheforegoingnalysis)s helpfulnclassifyingndexplain-ingdifferencesnthese ariables. posthoc testDuncan'smultiple-range)asused, houghhismay e a more onservativepproachhansstrictlyecessary.The resultsre shown nTable4.A number fconclusions ollow rom his able.First,utonomousubsidi-aries re ignificantlyoungerhan eceptive;eceptiveubsidiariesre, n aver-age,slightlylder han ctive, hough ot ignificantlyo. Thus wemust on-cludethat here s littlendication f a lifecycleor stagesofdevelopmenteffect. econd,bothquiescent nd autonomousubsidiariesre significantlysmallermployershan ctive ffiliates;eceptiveubsidiarieslsohavehigheremploymentevels, utnot ignificantlyo, ndicatingarge ariances nthis ar-iable.Third, ales ofquiescent ubsidiariesresignificantlyelowthose fac-306 mlrvol.37, 1997/4



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Evaluation fthe ntegration-responsivenessrameworkTable 3. Summaryf theCharacteristicsf the ourGroups fSubsidiariesCluster : QuiescentubsidiariesLinkageswith he arentrother arts f tsnetworkreveryow nthis roup;man-ufacturing,roductndquality ecisions re notmade with view to servingheparent'sustomersnothermarkets. ost echnologyevelopments carried ut en-trally;he mall ocaleffort,here texists tall, s not haredwith ister ubsidiar-ies.HQ applies irtuallyo control ver uality, roductionr stocks. ustomersndtheir equirementsreeasily dentified,s arethe dentitiesndstrategiesf com-petitors.echnologys stable, roductsrerelatively ature,ndthemanufacturingprocess s well advanced longthe earningurve.Managers avebroadlyimilarbackgroundsnd dopt he companyolution atherhan eing timulatedy ocalmarketroblems.Cluster : AutonomousubsidiariesThisgroups characterisedy ownetworkinkagesnd ocal decisionmaking.heremay e some haringftechnologyith isterubsidiaries,t a fairlyow evel, ndcentral ontrolsmuch educed. nlike he uiescentubsidary,ustomereeds remuchmore ifficulto dentify,s arecompetitorsnd heirtrategies.echnologysstill volvingnd he roductine s still airly ew.Theexecutive roup avediffer-ent ackgroundsnddonot dentifyloselywith he rganisationr ts orporateul-ture.Cluster : Active ubsidiariesThisgroups themirror-imagefthe uiescentubsidiary.irms ere how highlevelof ntegrationnall sixvariables,speciallyn thefact hat hey recalledonto erviceheMNCparent'sustomersorld-wide.ocalresponsivenesss alsohigh,

drivenspecially ysubstantialifficultyn dentifyingompetitorsndtheirtrate-gies, ndbythevarietyf unknownsnproductndprocess pecifications.Cluster : ReceptiveubsidiariesThesefirmsepresenthe onverse fthe utonomousubsidiaries.ntegrationac-tors re all high, speciallyn relationothe entralisationftechnology.ocal re-sponsivenessariablesreall fairlyow, hougherhapshe evelofmanufacturingsophistications somewhatigherhan or uiescentubsidiaries.

Table4. ComparisonsfStructuralariables mong heFour trategyroupingsClusters Structuralariablemeans

Age Employment Sales ExportpropensityCluster Quiescentubsidiaries 2 1 7 479 60.1 27.43Cluster : Autonomousubsidiaries 16.9 528 102.6 30.5Cluster : Active ubsidiaries 25.1 1934 342.4 39.4Cluster: Receptiveubsidiaries 26.7 1242 307.8 42.7Results fDuncan'smultipleange est 4>2 3>1,2 3>1 4>1Duncan'smultipleangeestndicateshat luster eansre ignificantlyifferentt he


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James . TaggartTable5. ComparisonsfOperational ariables mongheFour trategy roupingsClusters Market Operationalariablesmeansscope Outputs Sales Inputs ProductionCluster Quiescentubsidiaries 2.56 1.40 5.69 2.51 4.62Cluster : Autonomousubsidiaries 3.28 1.95 5.60 2.95 4.12Cluster : Active ubsidiaries 3.63 2.72 5.19 3.75 3.97Cluster : Receptiveubsidiaries 3.69 2.33 5.75 3.14 4.49Resultsof uncan'smultiple ange est 1


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Evaluation of the ntegration-responsivenessrameworktheresults f theDuncanmultiple ange est.Autonomousubsidiarieso, in-deed,manufacturesignificantlyigher roportionftheir wn alesthan ctiveaffiliates,s do quiescent ubsidiaries. eceptive ubsidiariesmanufacturehehighest roportion,nd ignificantlyore han ctive ubsidiaries.he converseis true fthefourthperationalariable,heproportionf materialnputs hatcomefrom ther roup ubsidiaries. he meanvalues how hekind f relation-ships xpected yRQ2.Active ubsidiariesavea higher roportionhan ecep-tive ffiliates,utnotquitesignificantlyo (p=0.09), andthe ameappliestothe utonomous-quiescentndreceptive-autonomousomparisons.ikewise,hemean cores or evelofproductionechnologyrebroadlyn inewithRQ2,butthe uncan ests ffernly artial upport.uiescentubsidiarieso, ndeed, avesignificantlyigherverageevels han utonomousndactive ubsidiaries,ndreceptiveffiliates avea significantlyigherevelthan ctive;otherwisehecomparisonsre not tatisticallyignificant.Theanalysesummarisedn Tables4 an 5 goa considerable aytosupport-ing hemodel, hus iving positive esponseoRQ2,as every aired ombina-tion f ubsidiaryypessseparatedy t east wo f he ariables.Wemay here-fore onclude hat hetaxonomyerived bovehas a substantialmeasure fvalidity.

InterpretationConfirmationfRQ1 suggestshat heJarillondMartinez1990) model s in-complete;n additionotheirhreetrategylassifications,fourthxistswhichhasbeendescribedere s quiescentubsidiary .ustver quarterfthe am-plefirms allwithinhis lassificationnd t s as clearlynddistinctlyefinedas the hreethertrategyypeswhich re imilarotheJarillondMartinezax-onomy.hetypicaluiescentubsidiaryasbeen stablishedorustover wentyyears,mploysround 00,has annual alesofsome60million,fwhichtex-portsustover quarter.nly tokenmountfthese xportsaround percentofsales)goestoother roup lants or urtherrocessingnd/orinal ssembly,thoughbout percentbyvalue)of theplant'smaterialnputsomefromistersubsidiaries.hequiescent ubsidiarymanufactures3 percent yvalueofitsown ales, ndustunder0percentfthe roductinewasdeveloped radaptedlocally.Marketcope svery arrow,eing onfinedotheUKwithome electedcountriesn continentalurope. he evelofproductionechnologyshigh,withfully ledgedmanufacturingechniqueseing mployed; & D,however,s lim-ited nscopeand s largelyonfinedo the daptationfmanufacturingechnol-ogy.Thus, his ype f ffiliateears strongesemblanceoWhitendPoynter'smlrvol.37, 1997/4 309



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James . Taggart(1984) miniatureeplica adopter ype) nd to the tarterubsidiaryfTaggartandHood 1995).No mode fformationatawascollectedn he urrentesearch,butTaggartnd Hood's starterubsidiary as somewhatess likely han thertypes o havebeenoriginatedy cquistion,ndwasperhapsmoreikelyo haverecentlyvolved rom successful istributionndservicingnit.The active ubsidiarys, nmanyways, he pposite fthe uiescentype.thas some imilarities ithJarillondMartinez' lassificationfthe amename,but s much ess bound o theparent's etwork.nthis ontext,thas more imi-larities o theproduct pecialist f White ndPoynterr the ntegratedranchplant fTaggartndHood.Perhapsconstrainedndependents a more pt ermhere.The typical eceptive ubsidiarys fairlylose to therationalised anu-facturerfWhite ndPoynterndhas some imilaritieso the mergentegionalsupplierfTaggartnd Hood. Jarillo nd Martinez'nterpretationfthis ypeslimited,ut heparallels recloseenougho retain he erminology.he autono-mous ubsidiarys, nmanyways, hemirror-imagef thereceptiveubsidiary.Ithas omeparallelswithWhite ndPoyntersminiatureeplicainnovator odel)and shares lements fTaggartnd Hood's strategicndependentndemergentregional upplier ypes.Again, t s closeenough o Jarillo nd Martinez' nter-pretationo retain heirerminology.he newmodel s shown nFigure .Figure4. Integration-ResponsivenesstSubsidiaryevel

Local ResponsivenessLow HighHigh Receptive ConstrainedSubsidiary Independent

Integration

Quiescent AutonomousLow Subsidiary Subsidiary310 mir vol.37, 1997/4



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Evaluation of the ntegration-responsivenessrameworkThe Quiescent SubsidiaryHavingonfirmedhe xistence f he uiescentubsidiary,finaltagewas addedto theresearch rocess. ive subsidiariesrom hepostal ample, dentifiedsquiescents,nd ocated lose to the lusterentroid, ere nterviewedt engthtodiscuss he indingsbove nd ink hese indingso a numberfotherubsid-iary haracteristics.s well as checkinghepositionwith egardo ntegrationandresponsiveness,achsubsidiary as alsoasked bout hedegree fdecisionmakingutonomythad, he xtent fproceduralusticeKim/Mauborgne991)whichvaluates ow he ubsidiaryeels t s treatedyHQ in the trategic an-agement rocess,ndhow he ubsidiaryerceivedtsoperations ereguided rmotivatedy he xtentfnetworkoordinationndconfigurationPorter 986).Ineach ase the hief xecutive, hohad lsocompletedisfirm'sriginalostalresearchnstrument,asinterviewed.Firm1 isGermanwned ndwasestablishedn theUK in 1985. tsannualsalesaresome18million,fwhich 5% is exported.t wassetuptomanufac-ture ehicle artsn a lowcostEuropeanocation oserve he ontinentalehi-cle assemblyndustry.ostdecisions remadebythe ubsidiaryfteronsult-ingwith Q; financialecisions, owever,remade argelyyHQ. RelationshipswithHQ aregenerallyood, houghhere asbeen noticeablemprovementnthe astfiveyears aralleledya significantncreasensubsidiaryerformance.Networkoordinationsgenerallyow, xceptn termsfmarketing;onfigura-tion s veryow ndeed,ndthefirmeliverstsoutput irectlyofinal ustom-ers. nmanyways, hese haracteristicsitwellwithhe irm'scknowledgedowlevelof ntegration;heChief xecutives aware fthe ow evelofresponsive-ness, s unhappy itht, nd s committedomakingubstantialmprovementsover henext iveyears.He believes hatmakinghe hiftohigheresponsive-nesswillbe aidedbytwofactors:irst,he xistingubsidiary-orientedecisionmaking rocesses; econd, he ubsidiary'smprovedargainingowerwithHQduetorapidlyncreasing erformance.Firm is US owned,stablishedn1955, ndmanufacturesndustrialextiles.ItwasoriginallyetuptoexploitheUK market,ut s now xportingearly alfof ts47millionnnual alestowidermarkets.ikefirm tsellsdirectlyo tscustomersatherhan singts nternationaletwork.ecisionmakings sharedwithHQ,withwhom heworkingelationshipsvery ood.Levelsofconfigura-tion ndcoordinationrehigh,ndtheChief xecutiveeesthis s the eason orlowresponsiveness,n that e s nowproducingormany fHQ's Europeanus-tomers,roadlyoHQ's specifications.ewassomewhaturprisedtbeing har-acteriseds a quiescentubsidiary,ut econfirmedhe riginalssessmentf n-tegrationndresponsiveness.heformers not een s a key ssue,but n discus-sion heChief xecutivegreed hat issubsidiary asunlikelyomeettsverymlrvol.37, 1997/4 311



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JamesH. Taggartambitiousalestargetsver henext iveyearswithout substantialncrease nresponsiveness.e had no clear dea of howthismighte done.Firm isalsoUS owned,ndwas setup n1988 o ccessthe uropeanhem-icals market.ts urnoverasgrown uicklyo some16million,nd sprojectedtoreach25millionwithin iveyears; round 0percentf he utputsexporteddirectlyo customers horequire airlytandardisedroducts,hough pecial-isedproductsre een s an areaofrealpotential.ecisionmakings sharedwithHQ and the elationships good, xceptnsofar s HQ makesmost ecisions e-gardinghethrustfthe ubsidiary's &D activities,nd this ausessome ll-will.Levelsofcoordinationndconfigurationrehigh,ndtheChief xecutivefeels hat hese actors illgradullyaseupthe evelof ntegration.e sees thisas advantageousnterms f hissubsidiaryervingmore f thegroup's xistingcustomers, any f whomhe cannot upply t themoment.naddition,e seestheneedfor ncreasedocalresponsiveness,nd feels hat ersuadingQ to re-lease ts ontrol nhisR & D facilitys thekey.He iskeenlyware fhisquies-cent tatus,nd waswrylymused ythe erminology.Firm is a Swiss owned pecialityoodmanufacturer,stablishedntheUKin1936. tsexportsre minimal nd ts ales evel s 12million; rowthnthisfigureasnotmatchednflationver he astfiveyears,nd he mploymentevelhas also fallen. hesubsidiarys highlyutonomous,nd the evelsof networkcoordinationnd onfigurationithin hicht peratesreveryow ndeed. ver-all,theChiefExecutive eemed atisfied ith hequiescent lassification,ndwith he ubsidiary's osition n theother trategyimensions iscussed. heexceptions thepoorrelationshipithHQ,which as been xacerbatedypooroperatingerformance.owintegrationas not een s an mportantactorut,after nextensive iscussion,heChiefExecutivecknowledgedhatncreasedlocalresponsivenessascriticalo chievingisfutureerformanceargets.omeofthis an beachieved hroughhehigh utonomyituation,ut substantialn-put fgroup esources illalso benecessary;heChief xecutivecceptedhatsome ttentiono mprovinghe ubsidiary/HQelationshipouldbenecessaryto ubricatehis rocess.Firm is a Japanesemanufacturerf food ngredients,etuporiginallyn1984toservice heUK market,ut third f ts7million ales s nowbeing x-portedosomecontinentaluropean ountries.hesubsidiaryada high evelofautonomyndrelationshipsithHQ areexcellent. oordinationfactivitiesis high, ndthis s mainly eflectednconstantlyigh lows f nformationndknowledgeroundhenetwork.onfigurations low, smighteexpected roma firmnthis ector; ogether ith hehigh evelofautonomy,hiswas seen asthe trategicmperativehat rientshe irmowardstsmarketpportunities.heChief xecutivewas surprisedo find is firmow onresponsivenessomparedtootherubsidiaries.wing o thenature f hisbusiness ndproducts,e seesthis s a moremportantactorhanntegration,ndquicklyndicated number312 mirvol.37, 1997/4



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Evaluation of the ntegration-responsivenessrameworkofpotential oves o ncrease isresponsiveness,llofwhich allwithin is uto-nomycope, nd all of which e was confident ouldhavethe upportfHQ.Inevitably,his election ffive irmssnotwholly epresentativef he har-acteristicsfthe uiescent roup s noted arlier. owever,hree eneral ointsworthighlightingmerge romhese iscussions.irst,esponsivenessas seenas themostmportantf the ixstrategicimensions,ollowed ythe evelofautonomy;nly roceduralusticewasthoughto be less mportanthanntegra-tion,houghhe ormer asseen s usefulnseeking Q resourcesoexpando-calresponsiveness.econd, llofthese irmsre haracterisedyhigh utonomyand owresponsiveness;inceautonomys anenabling actornrespect fre-sponsivenessPrahalad/Doz987), tmaybe that hemost ignificantifferencebetweenuiescentsnd autonomousubsidiariess that he atter re morewill-ingtouse theirutonomyo maximise esponsiveness.hird, oneof thefivequiescents ish oremainn this uadrant;our imto become utonomousub-sidiaries, ith irm workingowards he onstrainedndependentlassification.

DiscussionPerhapshemostnterestingindingfthis esearchs the efinitionnddetaileddescriptionf the uiescentubsidiaryype. his raises hree uestions:why sthis trategyype ot ncludedn themodel fJarillondMartinez; hat retheimplicationsfthe uiescentubsidiaryype; ndwhat utureole s there orquiescentubsidiary?arillondMartinezertainly ake heoreticalllowancefor thistype: . . . thesetwo dimensionsre independent: subsidiarymayoccupyny neofthe hart's ourorners .hemost bvious xplanations thatthis ype fsubsidiaryustdoesnotoccur nSpain,whose conomy asdevel-opedand ndustrialisedapidlyince he ndoftheFranco egimendthe cce-sion otheEuropean ommunityEC). Therehas been phaseofstrongnterna-tionalisationn whichMNC subsidiaries aveparticipatedully,which eems(accordingo JarillondMartinez)o have nvolvedhemn substantialhangesofrole nd hiftncompetitive ode. ntegrationfSpainwithin heEC has en-couragedntegrationfSpanish ffiliates ith isterubsidiariesn othermem-ber ountries,nd he peningfnewEuropeanmarketsasencouragedtandar-disation t theexpense f local responsiveness.hismaybe an inappropriateenvironmentor hequiescent ubsidiarys described reviously. numberfmethodologicalifferencesay lsocontribute.arillondMartinez'amplewasnon-probabilistic ,hats, t was selected o nclude hemostmportantoreignfirmsneightndustrialectors. lso,thevariables sedweredifferent,houghthis pplies ess to ntegration.hisresearchsedfive esponsivenessariablesmirvol.37, 1997/4 313



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James H. Taggarttaken irectlyrom rahalad nd Doz' originalwork,ndperhaps hey ontrib-ute o more roadly-basedonstruct;arillondMartinez sed hreeperationalvariableswhichmayproduce more pecific esponsivenessonstruct,houghone could lsobe interpreteds a measure f ntegration.It is unlikelyhat proactivemanagementeamwouldbe content orunquiescentubsidiarysdescribed ere; ndeed,tmay earguedhat uch man-agementeamwould ithermove n orquickly hange he oleofthe ubsidiary,and some vidence fthiswasgathered uringhe ivepost-testnterviews.hequiescentubsidiaryepresentsheworst f all scenarios;t neitherarticipatesfullynmultinationalityhroughnternationalntegrationf ctivitieshat re o-ordinatedffectivelyyheadquarters,ordoes t become keyplayern the o-caleconomy ybeing ble tomake ubstantialesource ommitmentsnresponseto ocalcompetitivepportunitiesr customer emands.Norcan t be temptingintermsfthe areer rospectsf senior ubsidiary anagers,s itmighte dif-ficult o establishuperior ersonal erformancensuch n environmenthatsrelativelyetached rom herest f the nternationaletwork. or themultina-tional arent,oo, t sdifficultoenvisage he uiescentubsidiarys an attrac-tive ropostion.tyields ew f he conomic enefitsfmultinationality,t eemstooperate eyond henormal ontrolweb ofheadquarters,nd t s unlikelyomaximise ommercialpportunitiesnthe ocalmarket. s a permanenttate faffairs,hiswouldbevirtuallyntolerableo most fficientNCs,which eavesonly wo ationalxplanations;ithert s anearly evelopmenttage or youngsubsidiarybut nly out f45quiescentubsidiariesre essthan iveyears ld),or itrepresents transitiontagebetween eceptivend autonomousor viceversa); gain, ome vidence f thiswasgathered uringhefivepost-testnter-views.Thisnotion f a transitiontage s a mostnterestingossibilityhat an-notbeexploredwith hedatafrom hepresentesearch,utmighterhaps e theobjectivef more ine-grainedtudy. uiescentubsidiaries illbe nomore t-tractiveo hostgovernmentss they avefewernternationalinkagesnd essoperationalcope,particularlynterms f newtechnologynd the ubsequentleakageof that ewtechnologynto he ocaleconomy. ue to theirpparentlylower evelofcapability,hese ubsidiaries ay evelop ewerkilled ersonnel,and willalmost ertainlyepoorerontributorsothe xchequer.nsummary,tishardlyikelyhat regionalrnational evelopmentgencywould pendmuchtime rdirectubstantialesourcesnto ttractinghis ind f ubsidiary,ocom-petitionor uchfootloosenwardnvestmentsouldbemuted.Lastly,wemaybrieflyonsider he utureoleofa quiescentubsidiary.neclearpossibilitys terminationfclosure. his wasthefate f theCommins n-gineplantnScotlandhatwasclosed n1995following periodwhentwaspro-gressivelymarginalised ithintshighlyntegratednternationaletwork,ndduring hich eriodtexperienced uch educedccesstoresourceshatwouldhaveallowed ttorespondochangingustomerndcompetitiveressures.he314 mirvol.37, 1997/4



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Evaluation of the ntegration-responsivenessrameworkother ossibilitysthe ype f role ransitioneferredoabove,whethernitiatedbyheadquartersrmotivatedy ubsidiary anagementtself. omeevidence fthiswasgathered uringhefivepost-testnterviews. notheroodexample stheApple'sEuropean actornCorkwhere he ocalmanagementeamhas suc-cessfullyncreased he evel of ntegrationithin hegroup y, lmost landes-tinely,ncreasingts nnovativeotentials a resource or hewhole nternationalnetworky developing series fprogressivelyomplex oftwareolutionsornewhardwareeveloped lsewhere. o use a well-wornhrase,heprescriptionfor uiescentubsidiariess shapeuporship ut .

ConclusionsThe overall imofthis aperwas tocarryut criticalssessmentfthe ntegra-tion-responsivenessramework.s with thertudies fthis ature,he wo tra-tegicdimensionsavedemonstratedfacilityordescribinghedifferentosi-tionsn the trategypacethatmay eoccupied yMNCsubsidiaries;he rame-workmay lsoallowmore roactivenddecentralisedubsidiariesway freact-ingtochangingompetitiveonditionsymakingompensatorylterationsfpositioningnthe trategypace.More pecifically,his esearch as ntendedsanempiricalvaluationndextensionftheJarillondMartinez1990) modelofsubsidiarytrategy,hichwas derived irectlyromhe ntegration-respon-siveness imensions.hatmodelwasshown obe inadequateoencompass neof the learly efinedtrategyositionshat volvedfromhe urrentnalysis,anda related aradigm asdevelopedhatmore ullyncapsulatedhefindings.Interpretationfthis dapted aradigmhowed substantialegree f nternalconsistency,ndwas alsoshownobeconsistentith lementsf ubsidiarytrat-egymodels eveloped yWhite ndPoynter1984)andTaggartndHood 1995).Theproposedmodelwasalsoefficientndistinguishinghefour roups fsub-sidiaries long numberfstructuralndoperationalariables. his s consis-tentwith he dviceofJarillondMartinezhat heir rameworkequiredefine-ment,ndthat tudiesn otherountries ouldbe illuminating.Comparisons ith heJarillondMartinezmodel re vident,ut ome ual-ifyingactorshould enoted. irst,he wo tudiesookplace n differentoun-triesSpain,UK); the ample or hefirsttudywas carefullyelected, utwasrandomlyelected or he econd;overall,evelsof ntegrationmong panishsubsidiarieseem ubstantiallyigherhan or heUK, though recise ompari-sons redifficult;lso,the wo conomiesreat differenttages fdevelopment,andthismay ignificantlyffecthe olesofMNC subsidiariesn each.Specifi-cally,tmaywellbe that he uiescentubsidiaryspresentn theUK butnot nmirvol.37, 1997/4 315



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JamesH. TaggartSpaindue to the pparentlyigherevelsof ntegrationnthe atter,nd also tobe possibly adically ifferenteasoning ehindocating subsidiarynSpain(a rapidly evelopingmanufacturigconomy) nd theUK (a moremature nvi-ronment).he variables sed todevelop heSpanish onstructs ere omewhatdifferentrom hepresent tudy, point hat as been discussed reviously.i-nally,hedifferencenculturalnvironmentetweenheUK andSpainmay lsoexplain he bsence fquiescentubsidiariesnthe atter.Welge 1994) and, o alesser xtent,irks1995)have mphasisedhat ulturemay e an mportantis-criminatoryariablenparticularases; thus,he ole fquiescent ubsidiary aynotbe acceptableomanagementeamswithinpanish ubsidiariesnd/or aynot epreceivedyMNCparentso be the ppropriateole o allocate o subsid-iariesoperating ithin heSpanishbusiness ulture. nlyfurthermpiricale-search n Spain,UK and other ountries illanswer hese uestions atisfac-torily.Notes1 As both dimensionsare measuredon a five-point cale, the theoretical orderbetweenthe tax-onomy types s themidpoint f the scale (i.e. 3). The actual means forthesample are 2.26 forintegrationnd 2.13 forresponsiveness.This implies that, verall, UK subsidiaries are some-what ess integratednd less responsivethanPrahaladand Doz might uggestfor global sam-ple of subsidiaries. The actual breakpoints etweenthetypesare thusestablishedbythe meanvalues for the sample. The clusters derived are therefore elative to theUK environment,ndcould be fullyvalidatedonly bya cross-country tudy.

ReferencesAgthe,K. E., ManagingtheMixedMarriage,BusinessHorizons,January February 990,pp. 37-43.Bartlett, . A., Managing and Building theTransnational: the New OrganisationalChallenge, inPorter,M. E. (ed.), Competitionn Global Industries,Boston: Harvard Business School Press1986, pp. 367-401.Bartlett, . A., Multinational tructural hange: Evolution VersusReorganization,nOtterbeck, .(ed.), The ManagementofHeadquarters-SubsidiaryRelationshipsin MultinationalCorpora-tions,Aldershot,Hants.: Gower 1981, pp. 121-145.Bartlett, . A./Ghoshal, ., ManagingAcross Borders: The transnational olution,Boston: HarvardBusiness School Press 1989.Bartlett,C. A./Ghoshal,S., Tap Your Subsidiaries forGlobal Reach, Harvard Business Review,November/December 986, pp. 87-94.Blau, P./Schoenherr, ., TheStructure ftheOrganisation,New York:Basic Books 1971.Cattell, R., The Scree Test for heNumberofFactors,MultivariateBehavioural Research, 1, 1966,pp. 245-276.Chaffe,E. E., Three Models ofStrategy, cademy of Management Review, 10, 1, 1985, do. 89-98.Chandler,A., Strategy nd Structure, ambridge,MA.: MIT Press 1962.Channon,D., Strategy nd Structure n BritishEnterprise,Boston: HarvardGraduate School ofBusiness Administration 973.

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