Developing a Successful Subsidiary Strategy

Chapter 3Subsidiary Evolution

DOI: 10.4324/9781003425502-4

The Oxford dictionary explains that the word subsidiary is derived from the Latin subsidiarius, which in turn is derived from subsidium meaning ‘support or assistance’. The word is generally taken to mean something that is connected to a superior entity. A subsidiary company is defined as one that is owned or controlled by another company and therefore operates in a subservient manner.

This common interpretation of the word also reflects how subsidiaries were viewed by managers and academics alike in the early days of corporate expansion. At that time, the literature saw everything from the HQ perspective and positioned subsidiaries as entities that were established by the head office ...