Integration and dispersion of innovation and marketing capabilities: Case studies of Japanese global firms in Korea

This paper presents a dynamic model that shows the evolving patterns of relationships between mother companies and their foreign subsidiaries. Specifically, this paper shows four different types of evolution between mother companies and their subsidiaries: (1) mutual dependence (early stage), (2) adaptation to local needs (intermediate stage), (3) mutual dependence (later stage), and (4) global expansion (mature stage). Based on this research framework, the case studies of three Japanese firms and their subsidiaries in Korea suggest four dynamic types according to external management environment and change in governance contexts. We summarize 4 stages of localization strategies based on the findings from these case studies. Further lessons and implications of this case will be discussed as well.