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.
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.
Table of Contents
1. Introduction
2. Theoretical background
3. Data Analysis
3.1 Google’s leadership style
3.2 10 Most Valuable Google Acquisitions:
3.3 The analysis of top 5 valuable acquisitions:
4. Conclusions and Predictions
Objectives and Topics
This paper examines the dynamics of parent-subsidiary relationships within modern Transnational Companies (TNCs). The primary objective is to investigate the factors influencing subsidiary management and their collective role in corporate success, specifically through the lens of Alphabet and its subsidiary, Google.
- Strategic management of subsidiaries in global TNC networks.
- Theoretical perspectives on headquarters-subsidiary interdependency.
- Analysis of unorthodox management models and innovation strategies.
- Case study of Google’s organizational structure and acquisition tactics.
- Evaluation of subsidiary autonomy and the impact of parental control.
Excerpt from the Book
Theoretical background
The majority of scientists agree that the more efficient in endlessly globalizing markets the TNC is, the more competitive it becomes in the world market. Only those businesses that manage to arrange their international activities within global networks have opportunities to attain durable competitiveness worldwide. In order to achieve world competitive advantage, revenues have to be managed concurrently, efficiency and innovation both are significant, and innovations can be implemented in many different parts of the organization (Bartlett and Ghoshal, 2002).
The transnational companies (TNCs) have been investigated from various theoretical perspectives among which may be studied as hierarchies, internal markets, or inter-organizational networks (Birkinshaw and Fey, 2000; Hedlund, 1986). This essay employs the network perspective, that became the chief method of research of the TNCs during the latest years (O'Donnell, 2000) and was also applied to the R&D activities of TNCs (Gassmann and Zedtwitz, 1999).
The concept of the TNCs is viewed as an 'inter-organizational network' of loosely coupled entities, rather than a hierarchical monolith. This structure provides the subsidiaries with freedom of development of its own exclusive resource profile by connecting the internal network of TNC units and the external network of main suppliers, customers and other key local companies (Baglieri, Bruno, Vasconcellos and Grando, 2010).
Summary of Chapters
Introduction: Provides an overview of inter-company collaboration and defines the research goal concerning parent-subsidiary management dynamics in TNCs.
Theoretical background: Reviews scientific literature regarding TNC structures, emphasizing the transition from hierarchical models to inter-organizational networks.
Data Analysis: Utilizes a case-study approach to explore the operational structure of Alphabet and the strategic rationale behind its major acquisitions.
Google’s leadership style: Describes the company's human-centric, unorthodox management principles, including the 70-20-10 innovation rule.
10 Most Valuable Google Acquisitions: Presents a data-driven list of key acquisitions since 1998, categorized by their domain of expertise.
The analysis of top 5 valuable acquisitions: Examines the specific strategic reasoning—such as patent acquisition or service integration—behind Google's most significant deals.
Conclusions and Predictions: Synthesizes the theoretical findings and case-study outcomes to reflect on the modern role of subsidiaries and potential future growth areas.
Keywords
Transnational Companies, TNCs, parent-subsidiary relationship, Alphabet, Google, strategic management, innovation, organizational network, subsidiaries, acquisitions, corporate culture, leadership style, global market, competitiveness, business model.
Frequently Asked Questions
What is the core focus of this research paper?
The paper explores the complex relationship between parent firms and their subsidiaries within modern Transnational Companies, focusing on how this interaction drives organizational success.
What are the primary themes discussed in the study?
Key themes include the evolution of subsidiary roles, the network perspective of TNCs, innovative management techniques, and the strategic rationale behind major corporate acquisitions.
What is the central research question?
The research seeks to determine how parent companies and subsidiaries reciprocally affect each other within the process of establishing and managing international cooperation.
Which methodology is employed in this research?
The author utilizes a qualitative case-study methodology, incorporating literature reviews, analysis of institutional reports, and empirical data from Alphabet and Google.
What does the main body of the work cover?
The main body examines the theoretical background of TNC structures, provides an in-depth analysis of Google’s unique leadership style, and conducts an evaluation of their top five corporate acquisitions.
Which keywords characterize this paper?
Significant keywords include Transnational Companies, parent-subsidiary relationship, innovation, Alphabet, Google, strategic management, and global competitiveness.
What is the "Toothbrush test" mentioned in the context of Google?
It is Larry Page’s decision-making framework, which asks if a potential acquisition is something that users will interact with daily and if it genuinely improves their lives.
How has the role of a subsidiary changed in modern TNCs?
The paper concludes that subsidiaries are no longer merely submissive executors of parent mandates, but have evolved into strategic entities capable of generating their own innovative technologies.
Why was the transition from Google to Alphabet significant?
The reorganization was designed to provide greater autonomy to companies operating outside of core Internet services, making the business structure cleaner and more accountable.
- Citation du texte
- Elina Lesyk (Auteur), 2017, The parent-subsidiary relationship in management of the modern Transnational Companies (TNCs). The case-study of the Google company, Munich, GRIN Verlag, https://www.grin.com/document/451845
