Reducing Psychic Distance Through Springboard Subsidiaries: An Exploratory Case Study

Magomedova, Nina; Achcaoucaou, Fariza; Miravitlles, Paloma

doi:10.1108/s1745-886220170000012024

Cited by 2 publications

(5 citation statements)

References 46 publications

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“…These findings are in line with Magomedova et al ’s (2017) study, which demonstrated that the direct distance between a parent home country and a target region was larger than the indirect distance through the springboard subsidiary (i.e. the sum of distances from the parent home country to a springboard subsidiary’s country and from the springboard subsidiary’s country to the target region).…”

Section: Discussionsupporting

confidence: 92%

“…In the case of springboard units, these capabilities are associated with their location-specific advantages (Pla-Barber and Camps, 2012). In particular, springboard subsidiaries are located in countries that offer intermediate psychic proximity to both the HQ’s home country and a target region (Magomedova et al , 2017), which makes them important bridges between the two. Moreover, the fact that springboard subsidiaries are located outside the target region can also be crucial for the development of the unique capabilities required to facilitate expansion in fragmented markets with major intra-regional conflicts.…”

Section: Drivers Of a Subsidiary Role Developmentmentioning

confidence: 99%

“…Such units are known as springboard subsidiaries and are defined as organisational units that are located at an intermediate position between the home country and target region in terms of institutional distance and experiential knowledge (Pla-Barber and Camps, 2012). This strategy has proven to be particularly effective for MNCs that operate in the dynamic environments of inter-regional expansion, and there is rapidly increasing debate on the role of such subsidiaries (Magomedova et al , 2017; Pla-Barber et al , 2018; Villar et al , 2018). In particular, these units are characterised by (1) their extra-regional position, i.e.…”

Section: Introductionmentioning

confidence: 99%

“…In particular, these units are characterised by (1) their extra-regional position, i.e. outside of the region that they administer (Pla-Barber and Camps, 2012), and (2) their intermediate psychic proximity to both the corporate home country and a target region (Magomedova et al , 2017). Given the novelty of the springboard role, the IB literature has hitherto been focused on understanding its unique features and has not had a chance to address the issue of how certain subsidiaries change their role into springboards.…”

Section: Introductionmentioning

confidence: 99%

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The nascence of a springboard subsidiary: drivers of the evolution of a subsidiary role

Magomedova

Achcaoucaou

Miravitlles

2021

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PurposeThe aim of this study is to explore the drivers of the evolution of a subsidiary’s strategic role from an ordinary subsidiary into a springboard subsidiary in multinational corporations, paying special attention to the role of subsidiary management in this transformation.Design/methodology/approachThe authors apply a case study methodology to analyse the transformation of three Spanish subsidiaries of European multinational companies into springboard subsidiaries to pursue opportunities in the Latin American region.FindingsThe results present evidence that the development of a springboard subsidiary’s role is influenced by a set of preliminary factors that include: (1) the coincidence of a favourable economic change in the target region of expansion and unfavourable market conditions in the springboard subsidiary’s home market; (2) location-specific advantages of a subsidiary that allow it to develop unique capabilities, such as the ability to reduce the psychic distance between the headquarters and target region, to balance intra-regional conflicts within the target region, and to effectively transfer knowledge from the headquarters to the target region; and (3) micro-political headquarters-subsidiary negotiation processes as a result of the subsidiary’s strong initiative, peculiarities of the structure of a multinational company, and a strong dependency of the headquarters on the subsidiary’s unique capabilities.Originality/valueThe study contributes to the International Business literature by providing an in-depth analysis of the evolution of springboard subsidiaries and explaining how ordinary subsidiaries located in saturated markets can trigger organisational change and achieve the extension of their strategic role.

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Section: Discussionsupporting

confidence: 92%

Section: Drivers Of a Subsidiary Role Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

The nascence of a springboard subsidiary: drivers of the evolution of a subsidiary role

Magomedova

Achcaoucaou

Miravitlles

2021

Self Cite

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“…Besides the linguistic similarities with the Latin American region, authors have compared qualitative and quantitative indicators using GLOBE, Hofstede's cultural dimensions, and the Lewis model and found that Spanish cultural experience only not bridges but propels other countries to Latin American culture [21]. As a result, Spain has been used as a springboard to enter Latin America to reduce cultural, psychic, and performance risks [23,24]. In this regard, Spanish esports firms' participation and influence in Latin America is continuously growing.…”

Section: Introductionmentioning

confidence: 99%

Knowledge Management in the Esports Industry: Sustainability, Continuity, and Achievement of Competitive Results

et al. 2021

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The increasing popularity and exponential growth of esports as a worldwide phenomenon has created a whole new industry with important implications for the different key players in the value chain. The digitalization process, which accelerated after the global spread of COVID-19, has introduced a collection of exciting changes to content production and delivery, with the Internet as its fundamental pillar. Knowledge management in successful esports organizations can be associated with their sustainability, continuity, and achievement of long-lasting competitive results in this industry. From a descriptive standpoint, this paper aims to analyze the determinants that have advanced the esports industry, especially in Spain. To achieve this goal, a SWOT analysis is carried out to highlight the keys that have developed this industry. This research contributes to studying the economic impact and the strategies organizations should follow to guarantee their future. Recommendations for both the industry and public administrations are further discussed.

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Reducing Psychic Distance Through Springboard Subsidiaries: An Exploratory Case Study

Cited by 2 publications

References 46 publications

The nascence of a springboard subsidiary: drivers of the evolution of a subsidiary role

The nascence of a springboard subsidiary: drivers of the evolution of a subsidiary role

Knowledge Management in the Esports Industry: Sustainability, Continuity, and Achievement of Competitive Results

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