The evolution of innovative activity in Asian emerging market subsidiaries of Western MNC's: the case of Buhler India

摘要

Subsidiaries of Western multinational companies located in Asian emerging markets are increasingly taking on a more competence-creating role. However, few studies have explored how these subsidiaries evolve from low-cost manufacturing to innovation. This study builds on longitudinal case data retrieved at the Indian subsidiary of Swiss processing technology manufacturer Buhler AG. The results reveal cross-functional interaction as a key mechanism driving subsidiary evolution and suggest that the relative importance of internal and external linkages varies based on the type of innovation. Thus, managers should also pay attention to innovation-related capabilities developed by other departments than official R&D units.