Newcastle University Business School

Event Item

Strategic renewal on parent level through the separation and subsequent reintegration of subsidiaries

Part of the Strategies, organisations and Society research groups' seminar series

Date/Time: Wednesday 8 November, 16:00 - 17:30

Venue: Room 4.23, Newcastle University Business School

Speaker: Martin Friesl

Prior research provides ample evidence of the innovation benefits of structurally separating innovative units from the main organization. Such benefits are largely conceptualized on the level of the spun out subsidiary. In contrast, this paper shows how the separation and subsequent reintegration of a subsidiary becomes a source of renewal for the parent company. We develop a process model that shows how structural separation can become a source of ’proximate isomorphic pressure’ that breaks the path dependence of the focal firm and results in the parent’s gradual convergence with the subsidiary. This creates the conditions for reintegration, and ultimately, strategic renewal. Our paper draws on the longitudinal analysis of strategic renewal of Immochan between 2006 and 2014. We contribute by applying a process perspective to structural ambidexterity and strategic renewal, identifying the important role of proximate isomorphic pressure in breaking path dependence, and challenging prevailing assumptions about the role of structural ambidexterity.