The `global city' misconceived: the myth of `global management' in transnational service firms

Abstract

The `global city hypothesis' proposed by Saskia Sassen – and subsequently developed by Manuel Castells and others in the theory of a globalized urban network – has in recent years formed the basis for the argument that power and control in transnational firms (TNCs) is primarily situated in global head-offices. Such offices are located in key urban centres such as London, New York or Tokyo where global managerial power is ultimately wielded and where senior managers make strategic decisions about transnational business activity. This paper takes issue with this theoretical legacy, arguing that the idea of strong centralised managerial power and control in contemporary TNCs is far more complex than this literature suggests. It explores how managerial control in some of the supposedly most globalized of business service industries – investment banking and management consultancy – cannot be understood as being centralised in global headquarter offices, and nor does it purely reside with a few senior managers at the top of the transnational organisation. Rather, it argues that managerial control in TNCs is diffused throughout a transnational network of management-level employees, and that strategic power in transnational firms resides with a larger and more dispersed group of actors than has been previously suggested. These arguments are developed through analysis of qualitative research into the managerial strategies and practices of senior business practitioners in the transnational investment banking and management consultancy industries. In presenting qualitative data from interviews with senior management in transnational corporate head offices, the paper thus examines the decision-making process of global management practice and unpacks the complex context in which transnational corporate strategy develops in such firms.