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Julian Birkinshaw, in his article ‘Entrepreneurship in Multinational Corporations: The Characteristics of Subsidiary Initiatives’, originally defines the phenomenon of subsidiary initiative as “a discrete, proactive undertaking that advances a new way for the corporation to use or expand its resources.” He further describes it as “essentially an entrepreneurial process, beginning with the identification of an opportunity and culminating in the commitment of resources to that opportunity” (Birkinshaw 1997, p. 207). Although many subsequent publications refer to Birkinshaw’s definition, various authors state that the phenomenon remains somewhat vague and is not yet fully understood (Dorrenbacher/Geppert 2009, p. 100, Ambos et al. 2010, p. 1100, Grohmann 2010, p. 7).

The objective of the present research was to more comprehensively and holistically investigate the potential relations between the role a foreign subsidiary holds in the MNC, its entrepreneurial initiative-taking behavior and the resulting outcomes. For this purpose, a contingent and resource-oriented research framework was developed, and an empirical investigation in the form of a multiple case study design was performed. The findings provide answers to all three research questions formulated at the beginning of this thesis.

This literature review on the topic of subsidiary initiatives discloses a certain lack of conceptual clarity concerning the phenomenon. After providing an overview of the research field, the paper applies a conception of entrepreneurship inspired by Schumpeter (1912) as a basis for refining our understanding of just what a subsidiary initiative is and of the different kinds of subsidiary initiative. A framework is developed with a view to the current and anticipated growing importance of highly populated countries like China and India which are bound to raise the MNC-internal profile and weight of subsidiaries serving these national mega-markets. The framework distinguishes between organizational disequilibrium and market disequilibrium as a way to classify different types and different degrees of subsidiary initiative. It is argued that prior conceptions of subsidiary initiative in practice reveal a bias towards organizational disequilibrium and tend to overlook important MNC subsidiary initiatives involving market disequilibrium, generally neglecting the entrepreneurial dimension that Birkinshaw (1997) associated with the term when he initiated this research stream. Metaphorically speaking, although Birkinshaw was always clearly interested in MNC subsidiary initiatives that “wag the dog,” most follow-up research examines initiatives that merely “rock the boat.” Our framework helps capture the distinction and anticipates more dog-wagging by MNC subsidiaries in the future.