The Development of Network Relations of MNC Subsidiaries : How Internal MNC and External (Local) Relations Evolve

Managing relations is a complex task for internationalizing firms and their subsidiaries: MNC subsidiaries are not only part of the MNC network but they also develop relations with network actors in their local environment.This paper investigates conceptually how MNC subsidiaries established through generic expansion build relations within the MNC and with external market and non-market actors as they evolve through stages of start-up, growth and maturity.The paper develops propositions, grounded in institutional theory, resource dependency theory and network approaches, on the changing strength and importance of a subsidiary's relations depending on its dependence or interdependence in these relations, with five groups of actors (MNC headquarters, other subsidiaries within the MNC, local business actors, local government and non-government organizations).The paper ends with drawing directions for future work that will enhance understanding of the dynamics of relationship management in MNC subsidiaries.