Control in less-hierarchical multinationals: The role of personal networks and informal communication

Abstract

The principal aim of this paper is to examine the presumption that a higher degree of decentralization, accompanied by a reduction in hierarchical levels, leads to intensified and effective horizontal communication across units and organization levels. It is argued that, in fact, personal networks and informal communication within the decentralized MNC can be distorted, even damaged by the structural changes, and the informal processes may actually work against the intended communication flows. The nature of both personal networks and informal communication makes control difficult yet, given the importance, MNCs inevitably utilize a variety of approaches in an attempt to influence their operation, sometimes in a counter-productive way.