In the recent past, subsidiaries used to perform necessary, but non- core and low- value functions for multinational firms. But this has changed, as subsidiaries are now proving to be the key drivers to knowledge, value creation and business innovation. In fact, several MNCs have now started calling their subsidiaries as Centres of Excellence (CoEs). The mutual dependence between the mother company and subsidiaries have generally grown all over, as exemplified by the case of IKEA and its units in Poland. At times, the top performance even induces the central leadership to invite their subsidiaries for full- fledged merging, to enable deeper value creation. This increased innovation levels though are partly, due to the much greater levels of independence they are bestowed with. They cultivate relationships to go beyond the MNC’s network.

Source:https://www.strategy-business.com/blog/How-subsidiaries-can-emerge-as-centers-of-excellence?gko=a133b

Uploaded Date:28 October 2019