Performance and Interaction Routines in Multinational Corporation

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JOURNALOF INTERNATIONALBUSINESS STUDIES, FIRSTQUARTER 1992

departmentalization and centralization [Martinez and Jarillo 1989]. Only recently have researchers begun to look at more informal coordinating mechanisms such as communication, socialization and employee transfer (e.g., Prahaladand Doz [1987]). These informal processes are embedded in historical traditionsthat are highly resistantto change [Stinchcombe 1965]. MNCs are, to some extent, "captives of their past" [Bartlettand Ghoshal 1989, p. 35]. This relative inertia in the face of volatile environments is readily apparentfrom a perspective that emphasizes the importance of routines for the day-to-day functioning of MNCs. One of the major challenges facing the MNC is to remain responsive to local differences while, at the same time, taking advantage of global opportunities. This local-global tension provokes enormous coordination problems. The MNC may seek to coordinateactivities in its subsidiaries through the promulagation of standardaccounting, purchasing, or reporting procedures, ignoring the importance of locally accepted routines. For example, the Coming Glass Works company, in its effort to coordinate its operations, insisted that foreign affiliates submit accounting information in English in the American accounting system format,even though these procedureswere useless to the subsidiaries [Bartlettand Yoshino 1981, p. 5]. Ratherthan trying to impose such routines on affiliates, MNC headquarters may seek to persuadebranchesto adoptinnovativeroutinesdevelopedelsewhere. This diffusion of innovation can run into the Not-Invented-Here Syndrome [Bartlettand Ghoshal 1989, pp. 118-19]. For example, Procterand Gamble's initial attempt to routinize the concept of standardEuropeanbrandsquickly founderedbecauseof lackof supportfromsubsidiarymanagerspreoccupiedwith the day-to-day routines of their national organizations [Bartlett 1983, p. 6]. The coordination of the MNC through the transmission of system-wide standard routines is, therefore, fraught with uncertainty. As Nelson and Winter [1982 p. 118] have pointed out, "the feasibility of close (let alone perfect) replication is quite problematic." This paper focuses on three aspects of this problematicreplication. First, the cross-culturalperspective on the transmission of routines within MNCs is presented. Second, I build on this cross-culturalperspective to investigate how teams within MNCs compete with each other throughthe enactmentof dramaturgicalroutines. Third, I discuss how such reiteratedactivities contributeto the structuringof complex internationalsystems. The overall message of the paper is thatroutines are fundamental elements of MNCs, conceptually distinct from the people who, at any given time, enactthem.A clearerfocus on flows of routinesacross boundariesin MNCs will help to clarifymany issues of researchand practice. THE TRANSMISSION