Managers determine whether global innovation initiatives succeed

When multinational enterprises assign responsibility for research and development (R&D) to their subsidiaries, the goal is often to increase innovation. However, new research from Mälardalen University (MDU) shows that an R&D mandate in itself is not sufficient. What ultimately determines success is how subsidiary managers act in practice—at the intersection of global strategies and local realities.

A formal R&D mandate often entails substantial changes, including new budgets, staffing, and responsibilities. Despite similar conditions, outcomes vary across subsidiaries. The research shows that assigning an R&D mandate from headquarters alone does not guarantee stronger innovation, financial, or strategic results. Instead, outcomes depend on how subsidiary managers act in their everyday work. By building relationships, addressing practical challenges, and mobilising resources, managers translate strategic ambitions into concrete action.

In her doctoral dissertation, Noushan Memar, researcher in business administration at MDU, studies 98 subsidiaries across eight Swedish multinational enterprises operating globally. Her research highlights how managerial attributes, relationships, and day-to-day practices shape innovation development as well as subsidiaries’ financial and strategic outcomes over time.

Previous research in international business has emphasised the importance of external ties to local knowledge environments for innovation capability. Memar’s findings show that such effects tend to emerge over time rather than immediately after an R&D mandate is assigned—that is, typically only after three to five years.

At the same time, internal relationships within the multinational group may create inefficiencies that slow innovation processes, even though they are essential for scaling ideas, generating sales, and contributing to overall corporate results.

The findings also underline the importance of local knowledge. Managers who are well embedded in their host-country environments often have better conditions for supporting subsidiary performance and strengthening their position within the multinational group.

“Innovation does not emerge automatically from structures or mandates,” says Noushan Memar. “It is created through managers’ everyday decisions, relationships, and priorities.”

Read the full interview published by ESBRI External link..

Noushan Memar defends her doctoral dissertation on 19 December at the Västerås campus. Read a summary of the dissertation here. External link.

Agenda 2030

By emphasising the human and organisational mechanisms behind innovation and value creation, this research aligns closely with the goals of Agenda 2030, particularly those related to sustainable industry, innovation, and economic growth. It highlights how responsible leadership, knowledge mobilisation, and effective use of resources are central to building competitive and sustainable organisations in a global economy.

How this research relates to Agenda 2030

• SDG 8 – Decent Work and Economic Growth:
  
  The research shows how subsidiary managers’ activities and capabilities shape innovation, strategic positioning, and financial outcomes after organisational change, highlighting the importance of managerial competence and effective leadership for sustaining productive and competitive organisations.
  
  
• SDG 9 – Industry, Innovation and Infrastructure:
  
  By explaining how innovation capacity develops through managerial action and relational embeddedness following the assignment of R&D mandates, the research contributes to a deeper understanding of how industrial innovation is built and sustained within multinational enterprises.
  
  
• SDG 12 – Responsible Consumption and Production:
  
  The findings demonstrate that innovation resources and knowledge must be actively and responsibly orchestrated to create value, showing how inefficient coordination and misaligned relationships can lead to wasted effort, while effective managerial action enables more responsible and efficient innovation processes.