Multinational Subsidiary Viability and Sustainability in the MedTech and ICT Sectors in Ireland; The Role of Talent in a time of 'Unusual Uncertainty'

The story surrounding vulnerability and sustainability of subsidiaries in a given location is not new, particularly, in a peripheral economy such as Ireland (Birkinshaw and Jonsson, 1998). Recently, however, there has been a... [ view full abstract ]

The story surrounding vulnerability and sustainability of subsidiaries in a given location is not new, particularly, in a peripheral economy such as Ireland (Birkinshaw and Jonsson, 1998). Recently, however, there has been a renewed focus on the overall attractiveness of any given location in sustaining industry, particularly given proposed global policy changes surrounding foreign direct investment taxation and Brexit, and with unique implications for US high-technology subsidiaries located in Ireland. There has also been general political and economic rhetoric both questioning and confirming the role of ‘talent’ in sustaining the competitive advantage for these subsidiaries. Ostensibly, there is a dearth of evidence as to the true role of talent in ‘tentpegging’ these subsidiaries in a time of ‘unusual uncertainty’. Using a qualitative methodology, this paper brings together developed concepts from both the general subsidiary management literature and the talent management literature, to examine both previous and very recent evidence on talent and subsidiary growth and evolution in five subsidiaries operating in the MedTech and ICT sectors.  Drawing on data collected over an 8 year period (2000-2008), and (2016-2017), this study explores the role of talent in subsidiary embeddedness, from two different macro time stances.

It is generally recognised that location has traditionally conferred advantage to subsidiaries, in terms of having access to various resident resources and capabilities in a local network (Bartlett and Ghoshal, 1990; Almeida and Phene, 2004). However, despite location advantage some subsidiaries are more successful than others (Rugman and Verbeke, 2001; Phene and Almeida, 2008) and it is argued that ‘subsidiary talent’, may be responsible for the variation in subsidiary roles rather than location-specific resources alone.  Talent can be drawn from a variety of resource pools for example leadership and technical talent (McDonnell et al., 2011). Ready et al., (2010) suggest that talent are those individuals with high potential, self-driven to exceed, have catalytic learning capabilities, with an enterprising spirit who possess dynamic sensors. At a local level it is argued that talent must be considered as value added resources in terms of a subsidiary’s capabilities (Dörrenbächer and Gammelgaard, 2006). Subsidiary talent implements an MNC’s strategies, facilitate access to valuable local resources and aid in the development of “transnational” capabilities (Tan and Mahoney, 2003:183). Birkinshaw et al., (2005:227) contend that subsidiaries are “not merely subordinate elements of their parent MNCs… [rather] have the potential for independent and entrepreneurial behaviour”. This is key to the role talent play in evolving the subsidiary and ultimately contributing to the growth of the MNC. This aligns with the pursuit of initiatives in the subsidiary management literature by entrepreneurial subsidiary managers, which Birkinshaw (2005)  argues is ‘rare in practice’.

Espousing a network and resource based perspective, this paper focuses on the specific role of talent in not only how the subsidiary generates their own strategies, but significantly, why subsidiaries pursue these strategies and examines the implications of these deliberately developed embedded relationships for the sustainability of the subsidiary over time in the host environment.