Subsidiary initiative effect in enterprise groups network: How initiatives drive network embeddedness dynamic changes?

Abstract

This paper researches on subsidiary initiatives' network effect, and mainly analyzes the dynamic relationships of both internal and external subsidiary initiative and subsidiary network embeddedness. On the view that enterprise groups are embedded in informal network structures, this paper laid a theoretical foundation for the research on subsidiary initiative mechanism and its inherent law. This paper put forward three key proposition: (1) internal network embeddedness create conditions for subsidiary implementing internal initiatives; and consider the network marginal effect, we have (2) Based on rational principles, subsidiaries which implement external initiatives will reduce its network embeddedness, and (3) Subsidiaries who obey rational principles of the subsidiary wouldn't infinitely increase its network embeddedness in enterprise groups. Finally, this study is based on a case study analyse of Hisense Group, through annual reports data of public companies and questionnaire surveys with key initiative and embeddedness information, and the result provides preliminary support for the hypothesized effect of subsidiary initiatives.