The Transition from Decentralized to Network-Based MNC Structures: An Evolutionary Perspective

Abstract

This paper investigates and models the transition process within established multinational corporations (MNCs) in moving from decentralized toward network-based structures. Whereas there has been substantial research on various MNC models, there has been little longitudinal research on the movement toward projected network-based models. This paper develops an evolutionary perspective of this transition, distinguishing adjustments altering how the MNC defines its “global” strategy, where it locates key resources, and how it structures and manages operations. It argues that rather then being a planned process, each phase represents a viable strategic response to then-existing challenges and opportunities. The paper also argues that the focus of the process shifts over time, initially focusing on building organizational linkages and adjusting the quantity and nature of resources within dispersed units, and later shifting toward reallocating resources and roles across units.