Abstract
Building on Hinings and Greenwood’s (1988) concept for the explanation of strategic change processes, this paper examines the organizational transformations in the internationalization process of Deutsche Treuhand-Gesellschaft. We identify three archetypes of the international organization of DTG/KPMG, which developed from a correspondent network via an international federal network organization to become a global advisory firm, undergoing various stages of transition, de-coupling and re-orientation. Our analysis (a) provides an in-depth understanding of the longitudinal and contextual character of internationalization as a strategic change process of one of the most prominent international accounting firms with a European origin and (b) contributes to a rapprochement of strategic change and internationalization literatures.
Highlights
Hinings and Greenwood (1988) understand strategic changes as changes of archetypes mediated by paths of transition, replacement and reorientation. Based on this framework we explore different organizational archetypes, dynamic factors of change, and tracks that Deutsche TreuhandGesellschaft (DTG) took in moving from a “correspondent network” to the “global advisory firm”
Even though not fully adapted, major elements of this emerging archetype have been remaining stable with Klynveld Peat Marwick Goerdeler (KPMG) over the last two decades: the differentiated structure and systems which are aimed at allowing for closer integration of the internationally dispersed activities, an interpretive scheme which reflects commercial values and the belief in the indispensability of the global center for the successful operation and performance of the national partner firms
In the mid 1960s, after an orientation phase, DTG formed a correspondent network with independent national companies, which, following various experimental and re-orientation phases, was replaced in the mid 1980s by a network organization based on a decentralized federal model
Summary
3. schizoid incoherence: the structures and processes reflect the tension of competing interpretive schemes within the organization (figure 1). For the case of two alternative archetypes, four prototypical paths resulting from the different combinatorial possibilities of the phases reflecting the movements between the archetypes can be differentiated (figure 2): 1. Inertia: transformation takes place only within the existing archetype in the form of minor structural adjustments (Greenwood/Hinings 1993); changes that are not compatible with the dominant interpretive scheme are suppressed (Greenwood/Hinings 1996a; Greenwood/Hinings 1988; Hinings/Greenwood 1988); 2. Discontinued transformation: transformation processes are triggered; in the process, individual elements of the structure decouple themselves from the dominant interpretive scheme; the weakened structural coherence may lead to negative developments in performance; management comes under pressure and returns to the old structures (Greenwood/Hinings 1988; Hinings/Greenwood 1988); Figure 2: Structures of paths (Source: Hinings/Greenwood 1988: 29) For the case of two alternative archetypes, four prototypical paths resulting from the different combinatorial possibilities of the phases reflecting the movements between the archetypes can be differentiated (figure 2): 1. inertia: transformation takes place only within the existing archetype in the form of minor structural adjustments (Greenwood/Hinings 1993); changes that are not compatible with the dominant interpretive scheme are suppressed (Greenwood/Hinings 1996a; Greenwood/Hinings 1988; Hinings/Greenwood 1988); 2. discontinued transformation: transformation processes are triggered; in the process, individual elements of the structure decouple themselves from the dominant interpretive scheme; the weakened structural coherence may lead to negative developments in performance; management comes under pressure and returns to the old structures (Greenwood/Hinings 1988; Hinings/Greenwood 1988); Figure 2: Structures of paths (Source: Hinings/Greenwood 1988: 29)
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