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Objective – Resilience is one of the most relevant aspects of business today. Taking action for resilience requires new ideas that embrace uncertainty and consider adaptations for absorbing environmental pressures and responding to unidentified risks. The present study empirically explores the efforts of foreign subsidiaries in the United States. Methodology – The analysis focuses on firms' activities across states. Parent company scale and performance, local market size, labor availability, and presence of other foreign firms are investigated in their power to discriminate between resilience activities and non-resilience actions. Findings – The results show the relative significance of overall parent performance in determining a subsidiary's resilience at a particular subnational location. Novelty – This study's focus on resilience activities and their determinants are unique. Original outcomes guide local actions for increasing business agility and inform multinational companies' executives about the importance of generating adequate business performance in preparation for disruption and supporting affiliates' resilience at their localities. Type of Paper: Empirical JEL Classification: F23; E66 Keywords: Resilience, Subnational Location; Foreign Subsidiary; a Multinational Company Reference to this paper should be made as follows: Wright, R. (2022). Subsidiary Activities: Parent Company and Local Predictors of Business Resilience, J. Bus. Econ. Review, 7(2), 127–140. https://doi.org/10.35609/jber.2022.7.2(2)

This study examines short-run economic and business impacts of the COVID-19 pandemic as a global disruption event. The purpose is to build propositions about specific subnational FDI (Foreign Direct Investment) developments in the short-term of global disturbance. We approach the investigation by reviewing FDI outcomes in the year prior and in the first year of the pandemic, at the U.S. national and subnational levels, and through the lens of local characteristics and FDI outcomes in the state of New Hampshire. Our methods include distribution and frequency analyses on two sets of data: secondary data on FDI and trade at the state level, and primary data as direct observations on firm activities in New Hampshire. Our leading method is the evaluation of data aimed at triangulating and consequently generating a set of propositions that explain phenomena observed in relation to short-term effects of disruption. Our methodological tools consist of an in-focus instance of the phenomena in one state, as a particular case for verifying the validity of our propositions, and comparisons with available data across states to establish the reliability of the proposed consequences. Our analysis provides evidence for subnational heterogeneity of global disruption impact. Our interstate trend analysis and unique data on FDI-related activities in New Hampshire reveal how foreign businesses respond to the external shock of global disruption in the short-run. We use our insights to propose that established regional supply chains and differences in local advantages determine varying FDI outcomes across subnational locations. As a result, we set forth three calls-to-action for regional policymakers: the development of initiatives to support strong trade and FDI-outcomes at all times and in preparation for global disruption; the promotion and facilitation of firms’ access to markets; and the implementation of actions that encourage the establishment of regional supply chains.

PurposeStrategies of embedding into the local environment are considered critical for multinational companies (MNCs) operating in Central and Eastern Europe. The purpose of this paper is to analyze such strategies in Romania.Design/methodology/approachThe theoretical framework draws on social network theory to investigate the extent, structure, and features of embedding in the context of four case studies.FindingsThe results suggest a shift in how MNCs respond to a changing competitive landscape in Romania. The findings indicate that, contrasting proficient strategies of establishing numerous connections at entry, the most valuable approaches are currently aimed at building a diverse but non‐redundant network of relationships that gives the company access to information and flexibility to react quickly to changes. Direct relationships with the government are found to be potentially detrimental, even if they may have been important at market entry.Research limitations/implicationsThe limitations of the research relate to the subjective nature of the testimony‐based material.Practical implicationsThe findings suggest that the local subsidiary management should stay connected with organizations that allow access to information about their industries, applicable legislation and future competitive pressures, while corporate headquarters need to give local management enough decision‐making freedom for the subsidiary to evolve with the environment.Originality/valueThe paper enhances knowledge of a strategic approach used extensively in transition and emerging markets, and adds to the understanding of MNCs' strategies in Romania.

The dynamic financial environment of Central and Eastern Europe allows for a clear determination of “best practices” in the banking industry through analysis of common patterns in banking and finance. We explain the specific practices that have led to successful adaptation on the part of international banks like ABN AMRO in Romania and to Romanian financial markets. In general, we have found, through a series of case studies designed to assess best practices, that the best performing strategies are those which are based upon “distributed decision making,” allowing for decisive action and rapid organizational learning at the local level. In order for rapid organizational learning to take place, efficient business relationships are critical to the firm's functioning. In addition, the firm must develop a substantial diversity in both its internal and external networks. © 2007 Wiley Periodicals, Inc.

Over a period of approximately 5 years, Pankaj Ghemawat of Harvard Business School and Daniel Levinthal of the Wharton School have been working on a detailed simulation (producing approximately a million fitness landscape graphs) in order to determine optimal patterns of decision-making for corporations. In 2006, we adapted this study, combining it with our own work on terrorism to examine what would happen if we inverted Ghemawat and Levinthal’s findings and sought to provide disinformation or otherwise interfere with the communications and decision processes of terrorist organizations in order to optimize poor decision-making and inefficiencies in organizational coordination, command, and control.

Notions of Darwinian selection have been implicit in economic theory for at least sixty years. Richard Nelson and Sidney Winter have argued that while evolutionary thinking was prevalent in prewar economics, the postwar Neoclassical school became almost entirely preoccupied with equilibrium conditions and their mathematical conditions. One of the problems with the economic interpretation of firm selection through competition has been a weak grasp on an incomplete scientific paradigm. As I.F. Price notes: “The biological metaphor has long lurked in the background of management theory largely because the message of ’survival of the fittest’ (usually wrongly attributed to Charles Darwin rather than Herbert Spencer) provides a seemingly natural model for market competition (e.g. Alchian 1950, Merrell 1984, Henderson 1989, Moore 1993), without seriously challenging the underlying paradigms of what an organisation is.” [1] In this paper we examine the application of dynamic fitness landscape models to economic theory, particularly the theory of technology substitution, drawing on recent work by Kauffman, Arthur, McKelvey, Nelson and Winter, and Windrum and Birchenhall. In particular we use Professor Post’s early work with John Holland on the genetic algorithm to explain some of the key differences between static and dynamic approaches to economic modeling.

The economies of Central and Eastern Europe (CEE) have been recognized as posing unique challenges to study. The scope and nature of their political and economic development processes vary widely across the region are characterized by substantial volatilities and are inherently complex. In this context, a renewed interest in the mechanisms of economic transition has arisen in order to explain the effects of Eastern European integration into the European Union as well as the consequent integration into global economic structures. This approach, which we shall refer to as “Transition Dynamics”, (TD), differs significantly from the more traditional macroeconomic and polotical science focus on purely internal processes of change. In this regard, the CEE transition to market can be described as a process characterized by out-of-equilibrium dynamics and a heterogeneous competitive landscape with high levels of complexity.

The paper explores strategies of adaptation to the environment as employed by multinational corporations in Central and Eastern Europe. Organizations are treated as adaptive systems that have to match the complexity of their environments. The justification of the research lies in the complex nature of the market institutions emerging from transition that emphasizes the need for new managerial frameworks. Adaptive approaches such as vertical integration and/or value-chain development, leveraging autonomy and integration, local knowledge acquisition, and embedding in the social and political environment are explored in their relationship to success in the region.

This study analyses the factors influencing supply chain strategies of manufacturers in Romania, and investigates whether the alignment of supply chain strategy to the product type makes a difference on performance. It is found that companies with innovative products have higher probability of using a responsive supply chain. Larger companies and companies further upstream are more likely to use a responsive supply chain. Firms may not need to match their supply chain to product type for improved performance. This is the first systematic research of supply chain strategies in Romania and only one of the few in emergent markets.

The paper investigates whether a local orientation improves multinational companies' subsidiary performance in Central and Eastern Europe (CEE). It is found that the extent to which subsidiaries match local deficiencies is significantly and negatively related to performance and that the choice of industry is a determinant of success. The results suggest that a broader set of strategic themes and building strategy 'at location' do not reflect positively on performance. Successful subsidiaries in CEE operate most efficiently not as environmental forces allow them, but through their own products and ideas.