MIT Sloan Management Review

Corporate Strategy, International Business

Subsidiary Initiatives to Develop New Markets

By Julian Birkinshaw and Nick Fry

April 15, 1998

Local initiatives provide winning opportunities and new vitality for MNCs. But managers need tactical savvy, persistence, and luck to break through corporate barriers.

In 1980, NCR’s subsidiary in Dundee, Scotland, was on the verge of closure. The operation had been established as a second-source manufacturer of NCR products, but a combination of technological changes in the marketplace, along with internal problems, had caused it to shrink from 6,500 employees in 1969 to 770 in 1980. Moreover, Dundee’s most promising product, the automatic teller machine (ATM), was struggling in the British marketplace because of serious quality problems.

Jim Adamson, the newly appointed general manager, had a mandate to turn the operation around — or close it. At an operational level, Adamson worked on improving manufacturing quality and restoring the confidence of major customers. At a more strategic level, he began to develop a vision for Dundee as NCR’s strategic center for the ATM business. Product development responsibility officially lay with headquarters (HQ) in Dayton, Ohio, but Adamson began directing his resources toward upgrading and renewing the Dundee product line to meet the emerging demands of its key customers, the big British banks. In the face of active resistance from the development group in Dayton, Adamson pursued a delicate strategy of cooperating with people there, while continuing privately to sponsor Dundee’s research program.

His persistence paid off. In 1982, Dundee launched a successful product upgrade and, eighteen months later, a next-generation ATM that... To read the complete article, login or sign-up using the form below.

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