Abstract
PurposeIn the mainstream international business literature on multinational corporations (MNCs), an authoritative central headquarter (HQ) that transfers standardised practices to its subsidiaries remains the norm. This study aims to explore how MNCs coordinate their management practices through principles.Design/methodology/approachThe paper draws on empirical findings from a qualitative in-depth single case study based on evidence-rich qualitative data including observations from how a high-tech MNC headquartered in Sweden coordinates its development practices.FindingsAn alternative informal coordination approach (i.e. coordination by principles) is identified. Additionally, antecedents and implications of the approach are presented.Practical implicationsCoordination by Principles may facilitate the internalisation of practices and be a feasible compromise between context adaptation and traditional standardisation, particularly for MNCs with highly heterogeneous research and development operations.Originality/valueThis paper highlights the importance of acknowledging that firm practices often are based on management ideas that HQs adopt to prevent loss of legitimacy. As such, this study contributes to the scarce literature that critically questions the assumption that HQs solely transfer practices to subsidiaries to improve subsidiary efficiency and performance.
Highlights
Coordinating heterogeneous and geographically distant subsidiaries is an essential part of International Management, as the successful implementation of international strategies strongly depends on adequate coordination of the multinational corporation (MNC)’s dispersed activities (Andersson and Forsgren, 1996)
This paper shows how the principles of management practices play an important role in the coordination of a global practice within a contemporary MNC
5.1 Antecedents for coordination by principles As we discuss in detail below, we identify four antecedents (Table 2) for Coordination by Principles in our case study: the nature of the MNC, the presence of a management idea with a high degree of legitimacy within the industry, HQ’s ability to perceive the variety of components of the management practice and the characteristics of the management idea
Summary
Coordinating heterogeneous and geographically distant subsidiaries is an essential part of International Management, as the successful implementation of international strategies strongly depends on adequate coordination of the multinational corporation (MNC)’s dispersed activities (Andersson and Forsgren, 1996). The discrepancies between the literature on MNC practices and the contemporary view of the MNC are especially problematic in light of the growing critical perspective on power and politics within MNCs, where the HQ is suggested to have little ability or interest to exert full control According to this perspective, the MNC is viewed as a “contested terrain” and the HQ’s ability to impose hierarchical control and globally standardised organisation structures and practices are significantly limited (Morgan and Kristensen, 2009; Mudambi et al, 2014). Based on the discussion above, this study contributes to the literature on MNCs’ global coordination of practices as it shows that in addition to the traditional scenario of authoritarian HQs transferring more or less standardised practices, some contemporary MNCs coordinate their practices globally through principles borrowed from management ideas. We conclude by summarising our findings and discussing our contributions and implications for further research
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
