Patterns of Strategic Control Within Multinational Corporations

Abstract

The management of multinational operations is often required to balance conflicting priorities between responsiveness at the national subsidiary level and central coordination for global competitiveness. Such balancing requires that relevant data be brought to bear on decisions, that consensus be created among key managers, and that relative power among them be carefully balanced. In large complex MNCs the balancing process can be institutionalized through the structuring of relationships between headquarters and subsidiaries.

Beyond formal organization reporting lines, relationships between headquarters and subsidiaries can be structured using a wide array of management tools. Consistent and inconsistent patterns in the use of these tools are identified and assessed, based on detailed analysis of management tools in a selected group of multinational companies. Findings suggest that selected tools must be used to manage data, to manage managers, and to manage conflicts; and that the successful companies blend an array of tools into a consistent management process. Companies with too narrow or too wide a repertory of tools and companies that fail to blend tools consistently face difficulties in trading off needs for responsiveness and needs for coordination.