Organization in-Between: The Evolution of the Mother-Daughter Structure of Managing Foreign Subsidiaries in Swedish MNCS

Abstract

In-depth case studies of 4 firms and a questionnaire survey of 52 companies show that the mother-daughter structure prevalent in Swedish MNCs is changing. Firms tends to adopt organizational structures ‘in between’ a pure mother-daughter one and one divided along product or technology lines. Rather than introducing formal matrix structures, relatively simple organizational forms are complemented by changes in information systems, budgeting procedures, rotation of personnel, and so forth. The control style is changing in the direction of slightly more formal performance evaluation. The changes can be understood as adaptations to growing size of the firms, increased product diversity, acquisitions of foreign companies, technological maturity, entry of new managers, and slower demand growth.