Strategy in Multinational Corporations (MNCs) – An exploratory study of the subsidiary perspective in an emerging market

Abstract

Despite the recent growth of the Turkish economy and its success in attracting Foreign Direct Investment (FDI) – especially within its banking sector – the context has received little attention in the literature. Moreover, previous studies – including strategy research – tends to focus on narrow operational issues, such as efficiency, profitability, and competitive structure, and in doing so overlooks the influence of context and other nuances which are implicit in strategy formulation. In contrast, this thesis utilises a broader methodology – a qualitative multiple case study – and applies a Practice Theory lens to construct a nuanced and contextualised view of strategy in the field of global banks operating in Istanbul from the subsidiary perspective.

The purpose of this thesis is to explore strategy within the subsidiaries, guided by the research question: What are the key influences on strategy development within the context on MNCs subsidiaries? The research is based on data from 30 semi-structured interviews with practitioners at 5 MNC subsidiaries in Istanbul, supported by secondary data, such as reports produced by the subsidiaries studied. The findings provide insights into the influences on strategy in this particular context and are grouped into insights to strategy, culture and headquarters – subsidiary relations, the latter two facilitated by the use of subsidiaries in an emerging market as vehicle in which to study strategy.

To summarise, the research provides a nuanced understanding of strategy within the chosen context which contributes to knowledge within the field of International Business. Theoretically speaking, the thesis adopts an integrative lens consisting of several strands of Practice Theory and applies it in a largely underexplored context. This subsequently makes a methodological contribution by presenting a qualitative case study in a field dominated by quantitative studies which essentially adds a context bound study in a field which is largely context free. The contribution of the research to practice consists of a series of managerial recommendations, supported by the findings on how to improve strategy formulation processes in MNC subsidiaries.

Like any research, the study has its limitations, and due to its underlying qualitative approach certainly lacks generalisability, although given the focus on context, objectivity is not something that this type of research seeks. Finally, the thesis uncovered some potentially interesting avenues for future research.