The Influence of Coordination Mechanisms on New Product Development in MNC Subsidiaries
Journal Title: BAR: Brazilian Administration Review - Year 2010, Vol 7, Issue 1
Abstract
This paper investigates the relationship between [MNC] coordination mechanisms and subsidiary new product development [NPD] activities. We focus on two essentially different coordination mechanisms, internal markets and global decision-making autonomy, and argue that both mechanisms are likely to increase a subsidiary’s exposure to market forces which, in turn, provides different kinds of incentives for a subsidiary’s in-house NPD and NPD outsourcing. We tested our hypotheses using structural equations modeling. The results suggest that internal markets have a positive effect on NPD outsourcing while global autonomy has a positive effect on inhouse NPD. Thus, this study contributes to integrating the internal market construct with the coordination mechanism stream of literature.
Authors and Affiliations
Boehe, Dirk Michael
Keywords
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