Subsidiary Implementation

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Effective Subsidiary implementation takes time because according to Ajax Persaud, Uma Kumar,Vinod Kumar.2002,59

One outcome of establishing globally dispersed

R&D labs is that coordination becomes more difficult

due to geographic, time, and cultural differences.

Advances in information and communications technologies

have helped to mitigate some of the coordination

difficulties. Nonetheless, significantly more time and

resources are needed to achieve effective coordination,

compared to the traditional approach in which R&D is

centralized at the headquarters.

Therefore good communication is important as

Within globally dispersed R&D labs,

in both the theoretical and empirical literature on

innovations (Tushman & Anderson, 1997)

common values have to be shared 61

Socialization emphasizes the creation of common

and shared understandings of goals, values, and practices

to influence both how subsidiary labs perceive their

interests and how they act. It is the process by which

organizational members learn the value system, norms,

and required behaviours of the organization


Autonomous labs also have the flexibility to cooperate

with other R&D labs within their group and to share

information and expertise, thereby improving their innovative



Persaud, Ajax, Uma Kumar and Vinod Kumar.2002. “Coordination Structures and Innovative

Performance in Global R&D Labs” Canadian Journal of Administrative Sciences 19(1). 57-75

Difference in cultures affecting subsidiaries

n Vol. 6, no. 4 of NRMJ, Guest and Hoque (1996) examine differences in the HR practices

of German, US and Japanese greenfield subsidiaries in Britain. The authors’ empirical

analysis, based on survey data, starts from the notion that ‘national cultures’ are

different ’and that this is manifested in the organisational cultures which are then

communicated to overseas subsidiaries

Depends on adaptation