6th International Scientific Conference on Applied Sciences and Engineering 26-27 January, 2016 Bayview Hotel Singapore

1. Abstract of Applied Sciences and Engineering, 2016, Vol.6
DOI: 10.18488/journal.1001/2016.6/1001.6
6th
International Scientific Conference on Applied
Sciences and Engineering
26-27 January, 2016
Bayview Hotel Singapore
Conference Website: www.scihost.org
15
Paper ID: 514/16/ 6
th
ISCASE
Sales Networks of Subsidiary in Multinational Corporations
(MNC) and Influence on Market Performance
Chong Yongsheng1
1
Graduate School of Economics and Managment,Tohoku University, Sendai, Japan
Abstract
Market performance of foreign subsidiaries in multination corporations (MNC) can be
determined by external partners, such as sales networks. Since the proposal of
'transnational' corporation (Ghoshal and Barlett, 1989), more challenges are faced by
MNCs to be competitive especially in the emerging markets. In the past subsidiaries
were seen merely as an agent of the MNC, however things have changes where they
proved to have important roles (Ghoshal and Nohria,1997; Gupta and Govindarajan,
1991; Birkinshaw, 1997). Many strategies on how to improve performance and remain
dominant have been researched up until now, however there are not much research on
subsidiary strategy at business level and its impact of subsidiary performance (Tian
and Slocum, 2014). Networks are known for their roles but with complex challenge due
to its ubiquity (Thorelli, 1986). Therefore more research need to be done as the
interactions and dynamic nature of networks and outcomes of network participation are
not clearly investigated (Chetty and Holm, 2000). These kinds of relationship often
leads to access of information, resources, markets and technologies (Gulati, Nohria
and Zaheer, 2000). Likewise it has other advantages such as learning, trust, norms,
equity and context. (Brass et al, 2004). Kim and Frazier (1996) note that value added
by the channel partner is decisive factor to achieve subsidiary's goal. The end result
due to the lack of focus on channel partners can be detrimental (eg., Dyer and Chu,
2000). In the example noted by London and Hart (2004), failure to assist or cooperate
with channel partners resulted a lower income market segment failure when the
product was launched. This stressed the responsibility of an MNC subsidiary to be the
bridge, managing and maintaining these channel relationships (Almeida and Phene,
2004; Holm et al, 2005). When it comes to network, Andersson, Forsgren and Holm
(2002) noted that relational embeddedness in external networks is important,
especially with the subsidiary's relationship with customers and suppliers. However it is
stressed later that more can be done than just customers and suppliers, such as
relationships with non-traditional partners, co-inventing custom solutions and building
local capacity (London and Hart, 2004). This research will investigate the relationship
between sales networks and the market performance of foreign subsidiaries in MNCs.
Questions will be examined on the advantages provided by sales networks, the effect
of the localization of knowledge to the autonomy of the subsidiaries, and the
knowledge sharing or transfer between subsidiaries and between MNCs HQ and
subsidiary.
Keywords: Sales networks, Distribution channels, Subsidiary
Contribution of study
This research will emphasize the need of subsidiary's sales netwotks relationship, hence execute strategies
that could influence market performance.