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Term Paper, 2017
15 Pages, Grade: 1
Nowadays inter-company collaborations for innovations have proven to be an influential method to provide the competitiveness around the world. This is particularly apparent in the case of large Transnational Companies (TNCs), who have invested capitals in setting up and enforcing many different kinds of strategic partnerships.
A new phenomenon in this strategic process of decision-making employs the subsidiaries, mainly in developing cooperation on the international scale. The strategy allows the economic globalization, sought by many TNCs, resulted from having access and sharing the most reliable proficiencies with the targeted markets. This cooperation can arise, both intra-company, by contributing capital to enhance the available competences within the total TNC network, as well as inter-company, by involving horizontal counterparts (competitors and distributors) and vertical ones (participants of the industry’s supply chain).
The present paper was impacted by the literature affirming that, in the case of the TNCs generating, gaining and diffusing knowledge may derive from the external as well as from the internal environment. The vital role of the subsidiaries in the whole process of international cooperation can influence the effective collaboration itself.
The goal of this essay is to study the crucial factors that affect managing of the subsidiaries and their role in the success of the TNCs, in their international cooperation. Most of the research on the specified issues was made at the level of the headquarters firm. A comprehensive approach has been adopted in the work, focusing on the parent-subsidiary perspectives, in order to understand more precisely whether these two sides reciprocally affect each other, in the entire process of creating, establishing and managing international cooperation.
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