Administrative Orientation and International Performance
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Abstract.A recenttrendininternational managementresearchhas beenthe developmentof contingencymodelsthatidentifyoptimalplanningand managementmodesforinternational business units,givenkey characteristicsof the product,market,and industry.In practice, however,planningandmanagementmodesappearto be dictatednotonlybyexternalmarket orientation. and industryconditions,butalso by internalaspects of the firm'sadministrative orientation Theintentof this paperis to examinehow aspects of the firm'sadministrative influencethechoiceof managementmodes,andto examinehowthechoiceof management modesimpactsinternational performance.
* A primary focus of current international management research rests on the development of contingency models for defining internationalmanagement activities. Frameworks developed by Lorange and Vancil [1975, 1977], Prahalad and Doz [1980], and Davidson and Haspeslagh [1982], for example, attempt to identify the optimal location and focus of management responsibilities for a business unit, given factors such as competitive conditions, cost structure, market characteristics, technological content, standardization potential, and life cycle stage. These models can be used to design customized management and planning approaches for individualbusiness units within a diversified firm. The ability or willingness of firms to adopt the management approaches suggested by such models appears to vary significantly. Some companies are able to implement completely customized management approaches. Others exhibit highly standardized management structures and systems.1 A firm's degree of flexibilityin permitting customization of management activities across business units is a key aspect of its administrative orientation. The term "administrativeflexibility"can be used to referto the degree of variance in management approaches across business units. Many dimensions of management activities can vary. The location of management responsibility for individual business units is a key variable. Firmsoperating with similardegrees of centralization of management responsibility across business units exhibit low administrative flexibility on this dimension. Other dimensions to be explored include variance in areas such as management objectives, structures, measurements, and control systems across business units; and variance in planning approaches across business units. Variance in planning approaches could be measured by applying a frameworkwhich assessed planning formats, time frame, process, and focus to identify variances in approaches across planning units. The degree of variance in each of these areas reflects the firm's administrative flexibility. To examine this issue further, it is useful to distinguish between engineered and autonomous variances in management and planning approaches. This distinction is critical in assessing a firm's broader administrative orientation. In some firms, variances in management approaches across business units reflect senior management decisions about the focus and the location of responsibil
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