DYNAMIC CAPABILITIES - FROM THE PERSPECTIVE OF SUBSIDIARIES IN EMERGING MARKETS

Many multinational companies (MNC) have subsidiaries in emerging markets to tap on the local resources and marketplace. These subsidiaries navigate the changing requirements in local environment, while juggling to meet the performance expectations of their parent organizations. Due to market volatility, subsidiaries increasingly play vital roles in helping organizations mitigate business challenges and generate firm-specific dynamic capabilities in the process. This study taps on in-depth interviews with seasoned subsidiary managers based in fast-changing emerging markets in Central America and North Asia, to understand the roles of the subsidiaries and the underlying mechanisms and values that subsidiaries in emerging markets bring to the parent organizations. Findings from these interviews revealed that subsidiaries at different stages of organization developmental phases utilize various forms of dynamic capabilities and the importance of transnational management strategies in subsidiaries to attain sustainable competitive advantages. The study emphasizes on discovering the common critical success factors in well-established multinational companies that help built sustainable and productive subsidiaries.