Multinational corporations, inter-organizational networks and subsidiary charter removals

This paper provides insights into the dynamics of a charter removal at a Hungarian subsidiary of the Siemens telecommunication switching division. By using inter-organizational network theory, we investigate how host-country factor endowments, the resource position of a subsidiary and the density of network exchange relationships within the organizational network influence the removal of a multinational corporate subsidiary's charter. The dispersion of resources in a multinational corporation drives intra-firm competition, which will typically lead to the removal of a subsidiary's charter if the subsidiary lacks specialized resources – typically an outcome of host country comparative disadvantages – and simultaneously holds a position on the periphery of the organizational network.