Enhancing operational performance in production subsidiaries : balancing autonomy, leveraging embeddedness

Autonomy, a central mechanism to coordinate manufacturing networks, is mainly reported as positively influencing performance. Next, internal and external embeddedness are found to influence performance positively. In the study at hand, we link autonomy, internal and external embeddedness and performance (efficiency and effectiveness) and analyse the relationships from an operations management perspective. In doing so, we find that autonomy has a significant and negative effect on efficiency and that internal and external embeddedness have a significant and positive effect on operational performance. We conclude that internal embeddedness is worthwhile to strive for and achievable through tighter plant control from headquarters