Control changes in multinational corporations: Adjusting control approaches in practice
- PDF / 643,033 Bytes
- 23 Pages / 595.276 x 790.866 pts Page_size
- 33 Downloads / 172 Views
Control changes in multinational corporations: Adjusting control approaches in practice Emma Stendahl1, Svante Schriber2 and Esther Tippmann3 1
College of Business, University College Dublin, Dublin, Ireland; 2 Stockholm Business School, Stockholm University, Stockholm, Sweden; 3 Cairnes School of Business and Economics, National University of Ireland Galway, Galway, Ireland Correspondence: E Stendahl, College of Business, University College Dublin, Dublin, Ireland e-mail: [email protected]
Abstract The issue of control in multinational corporations (MNCs) is central to international business scholarship. However, prior literature tends to provide a static perspective offering few theoretical insights on control changes, especially the practices that enable control adjustments. Adopting a practice theory perspective, we consider control as ‘‘in the making’’ whereby adjustments emerge through a social accomplishment, constituted and reconstituted as headquarters and subsidiaries engage in a co-creating process. Using a longitudinal case study approach, we had the rare opportunity to track and compare an unsuccessful and a successful attempt to adjust control in an MNC over time. Our main theoretical contribution is a model of adjusting control in MNCs that details the practices that enable control changes. This model offers theoretical implications for organizational control theory in MNCs, especially in relation to theorizing the subsidiary contribution in the design of control, the reconciliation of raised tensions in headquarters–subsidiary relationships, and the nature of unintended consequences in the adjustment process. Our study also contributes to theories on MNC change, as it details the construction of an ongoing strategy–structure alignment for strategic flexibility. Journal of International Business Studies (2020). https://doi.org/10.1057/s41267-020-00371-5 Keywords: MNC; control; change; flexibility; case study; headquarters–subsidiary relationships
Electronic supplementary material The online version of this article (https://doi.org/10.1057/s41267-020-003715) contains supplementary material, which is available to authorized users. Received: 23 December 2017 Revised: 25 August 2020 Accepted: 26 August 2020
INTRODUCTION In this paper, we focus on control changes in multinational corporations (MNCs), especially the adjusting of control to respond to changing corporate and subsidiary strategies (Brenner & Ambos, 2013; Doz & Prahalad, 1981). The issue of control is central to the management of the MNC and has a long tradition within international business (e.g., Bartlett & Ghoshal, 1989; Doz & Prahalad, 1981, 1984; Kostova, Marano, & Tallman, 2016; Martinez & Jarillo, 1989). To ensure the strategic alignment of foreign subsidiaries, headquarters need to select and use an appropriate mix of control mechanisms, or a control approach, to control subsidiaries, including the centralization of decision-making (Child, 1972;
Control changes in multinational corporations
Gates & Egelhoff, 1986; Hennart, 199
Data Loading...
