The relevance of interdependence between headquarter and subsidiary organisations for product launch outcomes. An in-depth analysis of the launch of Xarelto® in the Bayer Healthcare organisation.

Abstract

Modern management literature highlights the importance of headquarter and country organisations working together in an interdependent fashion to improve their performance. However, empirical support for this link is scarce; moreover, the theoretical framework on the factors that may affect these relationships and the prerequisites for fostering them is limited. Current literature highlights the importance of high levels of interdependency between HQs and subsidiaries for the performance of the subsidiary, but a direct relationship has not been established. In this research, the link between headquarter-subsidiary interdependence and subsidiary-level performance is empirically probed and explored, using a longitudinal, multi-method approach that combines quantitative and qualitative data. Responses to surveys from 53 marketing and business managers are used to describe the interdependence levels, which are then combined with actual launch outcomes data for Xarelto® in their respective countries. Based on the survey results, a direct link between headquarter and subsidiary interdependence and the launch success of Xarleto® could not be established and subsidiary interdependence and uptake levels were used to select 10 countries for further explorative interviews. The results of these highlighted that, through fully collaborative and supportive headquarter subsidiary relationships, improved knowledge transfer, avoidance of duplication and leveraging of materials and expertise, product launch outcomes in the subsidiary could be enhanced. Moderators to these relationships and factors to maintain these relationships will be presented and this research and a link to network theory and social capital will be made. This research provides several practical recommendations that can be taken into consideration when planning future launches to enhance product uptake in subsidiary markets.