The effects of networks and autonomy on foreign-owned subsidiary competence development in Taiwan

Abstract

Purpose: The purpose of this paper is to investigate the role of networks and autonomy in competence development of foreign-owned subsidiaries (FOS) located in Taiwan. Design/methodology/approach: Survey data have been collected from FOS located in the mid-range emerging economy of Taiwan and analysed using structured equation modelling and fuzzy set qualitative comparative analysis (fsQCA) techniques. Findings: The results show that decision-making autonomy and intra-organisational networks are important factors for primary and support competence development. However, by using fsQCA technique the authors also show that many subsidiaries differ from that main pattern. For instance, local business and non-business networks can also contribute to primary competence development, but only in high autonomy subsidiaries. Originality/value: The originality of this paper lies in the detailed investigation of how fine grained network relationship strengths (intra-, business-, non-business local networks) affect different levels of subsidiary competencies (primary and support activities). The authors also provide novelty in applying a combination of symmetric (structural-equation modeling – partial least squared) and non-symmetric (fsQCA) analytical techniques.