The Transfer of Organizational Culture Overseas: An Approach to Control in the Multinational Corporation
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* Control of subsidiaries of multinational firms by their headquarters is a topic of interest for researchers and managers alike. [For example, see Hulburt and Brandt 1980; Negandhi and Baliga 1979.] The issue of control has been addressed extensively in the literature of both organization theory and multinational management. Tannenbaum [1968, p.3] has described the importance of control by stating, "It is the function of control to bring about conformance to organizational requirements and achievement of the ultimate purposes of the organization." Internal structures, control, and coordination mechanisms are a key to the management of the multinational firm. This was one of the central issues addressed by leading scholars at a recent conference on the "Functioning of Multinational Corporations" held in West Berlin [Negandhi 1980]. This paper will present the results of a study which investigated in depth the manifestations of 2 different organizational control styles in the relationship between headquarters and subsidiary of 2 multinational firms. The control styles studied were formal, bureaucratic control and informal, cultural control. Any examination of organizations and control must begin with Weber [1946]. In Weber's classical bureaucratic model of organization, control relies on the use of explicit formal rules and regulations. Power and authority have a rational/legal basis. In contrast, an organization with informal, cultural control relies on an implicit organization-wide culture within the organization for the control of organization members. In such an organization, power and authority, in Weber's terms, are based on the customs and traditions inherent in the organizational culture. This latter type of control rarely has been addressed explicitly in the literature on organizations, multinational or otherwise. The 2 control systems can be conceptualized as Weberian "ideal types" and in their extreme "pure" form can be regarded as opposite approaches to organiza-
INTRODUCTION
*Alfred M. Jaeger is Assistant Professor of Organizational Behavior and Management Policy at the Faculty of Management, McGill University. He has written several articles in the areas of multinational management, organizational control, and strategic management and has consulted in these fields. The author wishes to thank the Organizational Research Training Program at Stanford University and COPPEAD-Federal University of Rio de Janeiro (Brazil) for their support of this research.
Journal of International Business Studies, Fall 1983 91
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tional control. Although such ideal types are never found in pure form in reality, they are a useful tool for the conceptualization of organizational processes. The ensuing discussion will first elaborate the concepts of bureaucratic and cultural control. The perspective developed will draw upon areas of organization theory and cultural ant
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