International Business: An Asia Pacific Perspective, Second Edition

12. Managing a Foreign Subsidiary

The management of a foreign subsidiary is a vital part of a multinational firm’s operations. As a multinational firm’s international operations grow in scope, subsidiaries often assume increasingly important roles and responsibilities within the organization. Managers in a firm’s foreign subsidiaries implement the corporate and business level strategies of a multinational firm. In some cases, senior management in a firm’s foreign subsidiaries can have substantial input into the formulation of a multinational firm’s overall strategies.

In this sense, a firm’s foreign subsidiaries reflect its strategies. The distribution of subsidiaries across regions of the world defines the geographic scope of a multinational ...