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What happened to the transnational? The emergence of the neo-global corporation

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Abstract

Bartlett and Ghoshal’s transnational ‘solution’ for managing the MNC remains popular among scholars and practitioners alike. However, our in-depth qualitative study of Unilever, an exemplary case of a transnational, found that in the period 2000–2012 the company evolved into a very different organizational form with a distinct set of characteristics. We call this the neo-global corporation. In explaining how and why this transformation occurred, we turn to organizational evolutionary theory, and use our case to generate a multi-cycle process model of MNC evolution. Given the dynamism of the MNC and its environments, we anticipate that the neo-global will also eventually transform, and call for more organization-level case studies of MNCs in future international business research.

Resume

La “solution” transnationale de Bartlett et Ghoshal pour la gestion des EMN reste populaire parmi les chercheurs et les praticiens. Cependant, notre étude qualitative approfondie d’Unilever, cas exemplaire d’une transnationale, a montré qu’au cours de la période 2000–2012, l’entreprise a évolué vers une forme d’organisation très différente avec un ensemble de caractéristiques nettement différentes. C’est ce que nous appelons l’entreprise néo-globale. En expliquant comment et pourquoi cette transformation s’est produite, nous nous tournons vers la théorie de l’évolution organisationnelle et utilisons notre cas pour générer un modèle processuel à cycles multiples de l’évolution des EMN. Étant donné le dynamisme de l’EMN et de ses environnements, nous prévoyons que le profil néo-global finira par se transformer et nous lançons un appel pour avoir davantage d’études de cas sur les EMN au niveau de l’organisation dans les futures recherches en International Business.

Resumen

La “solución” transnacional de Bartlett y Ghoshal para gestionar la EMN permanece popular entre los académicos y profesionales por igual. Sin embargo, nuestro estudio cualitativo en profundidad de Unilver, un caso ejemplar de una transnacional, encontró que en el periodo 2000–2012 la compaía evolucionó en una forma organizacional muy diferente con un conjunto de caractaristicas claramente diferente. Llamamos a esto la corporación neo-global. Al explicar cómo y por qué esta transformación ocurre, recurrimos a la teoría de la evolución organizacional, y usamos nuestro caso para generar un modelo de proceso de múltiples ciclos de la evolución de la EMN. Dado el mecanismo de la EMN y sus entornos, anticipamos que también la neo-global eventualmente se transformará, y requeriremos más estudios de casos de multinacionales a nivel de la organización en la invetsigación futura de Negocios Internacionales.

Resumo

A “solução” transnacional de Bartlett e Ghoshal para administrar a MNC continua popular entre acadêmicos e praticantes. No entanto, nosso estudo qualitativo aprofundado da Unilever, um caso exemplar de uma transnacional, descobriu que no período de 2000–2012, a empresa evoluiu para uma forma organizacional muito diferente, com um conjunto distintamente diferente de características. Chamamos isso de corporação neoglobal. Ao explicar como e por que essa transformação ocorreu, nos voltamos para a teoria organizacional evolutiva, e usamos nosso caso para gerar um modelo de processo multiciclo de evolução de MNC. Dado o dinamismo da MNC e de seus ambientes, prevemos que o neoglobal também eventualmente se transformará, e demandará mais estudos de casos em nível de organização de MNCs na futura pesquisa de Negócios Internacionais.

摘要

Bartlett和Ghoshals管理跨国公司的跨国 “解决方案” 仍受学者和从业者的欢迎。然而, 我们对联合利华进行的一个深入定性的跨国典型案例研究发现, 在2000 - 2012年间, 该公司演变成了一种非常不同的组织形式, 具有一组截然不同的特征。我们称之为新全球公司。 在解释这种转变的发生方式和原因时, 我们转向组织演化理论, 并用我们的案例来生成跨国公司演化的多周期过程模型。 考虑到跨国公司及其环境的动态性, 我们预计新全球化也将最终转型, 并呼吁在未来的国际商务研究中对跨国公司进行更多在组织层面上的案例研究。

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Acknowledgements

First and foremost, we would like to thank Editor-in-Chief Alain Verbeke, Guest Editor Ivo Zander, and our three reviewers for their very insightful feedback during the review process. In addition, we would like to thank Peter Liesch, Denice Welch, Anne Hoekman, Tamara Oyarce Lopez and Jessica Mees-Young for their feedback, editing and administrative support, and the design of our models. Our paper also benefited greatly from the discussions with the participants of the 2016 Helsinki Workshop on the future of MNC research. Thank you, Ulf Andersson, Mehdi Boussebaa, Anna Brattström, Yves Doz, Mikael Eriksson, Ulf Holm, Perttu Kähäri, Paula Kilpinen, Rebecca Piekkari, and Udo Zander.

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Authors and Affiliations

  1. Discipline of International Business, University of Sydney Business School, Abercrombie Building, Sydney, 2006, Australia

    Jacqueline Mees-Buss & Catherine Welch

  2. Professor Emerita of Organization Studies, MIT Sloan School of Management, 100 Main Street, Cambridge, MA, 02142, USA

    D. Eleanor Westney

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  1. Jacqueline Mees-Buss
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Appendices

APPENDIX 1: PARTICIPANTS7

Interview number

Most recent role (S)

Recent workplace locations

1

Region B, Consumer & Market Insight Manager

Country 8

2

Global Brand Development Manager

Country 7, 13

3

Local Brand Building Manager Dove

Country 2

4

Region B, D, SVP Operations, Product Category G

Country 11, 12

5

Global Brand Development Director Dove, Product Line A

Country 5, 8

6

Global Sustainability Manager

Country 14

7

Global Brand Development Director Dove Social Mission

Country 3, 14

8 (2×)

Region B, D, E, Director Procurement & Logistics

Country 11, 20

9

Global Brand Development Director Dove, Product Line B

Country 4, 7, 14

10 (2×)

Global Brand Development Director Dove, Product Line C

Country 4, 5

11

Global Sustainability and Innovation Projects Director Dove

Country 14, 15

12

Region B, External Consultant – Advertising Creative Director

Country 14

13 (2×)

Region B, External Consultant – Advertising Strategic Planner

Country 4, 14

14

External Consultant – Psychologist

Country 14

15

Global Brand Development Manager Dove, Product Line B

Country 7, 14

16

Global brand SVP Dove – Global Category EVP, Category F

Country 4, 14

17

Region B, CMO, Category H – Global CMO

Country 4, 5, 6, 14

18

Global President, Category H

Country 14

19

Global R&D Director, Product Line C

Country 4

20

Global R&D Director, Product Line B

Country 4

21

Global VP R&D, Product Lines A, B & C

Country 4, 8, 14

22

Global Brand Development, Product Line E

Country 4, 10

23

Global Consumer & Market Insight Director, Product Lines A, B, C

Country 4

24

Global Brand Director Dove Social Mission

Country 1, 14

25

Local Category Manager, Category H

Country 1, 2, 14

26

Local Marketing Director, Category H

Country 2

27

Local Chairman, subregion within Region B

Country 11, 13

28

Local Sustainability & Corporate Affairs manager

Country 1, 2, 14

29 (4×)

Region B, VP Marketing, Product Line A, B & C/Global SVP Dove, Category D

Country 8, 11, 14

30

Region F, External Consultant – Strategic Planner Advertising

Country 1, 4

31

Global SVP Dove

Country 4, 14

32

Region B, SVP Marketing, Category H

Country 6, 9, 10, 14

33

Region B, Brand Liaison Manager

Country 8, 14

34

Region B, Consumer and Market Insight Manager

Country 4, 8

35

Global Brand Director, Product Line C

Country 4, 11, 19

36

Region B, Brand Director Dove

Country 4, 8

37

Region B, External Consultant – Strategy Planner Advertising

Country 14

38

Global VP Brand Development – Dove Masterbrand

Country 4, 14;

39

Local Category VP – Product Lines A, B & C

Country 4, 7

40

Local Category Director – Product Lines A, B & C

Country 3

41

Local External Consultant – Advertising Media Producer

Country 1, 3, 4

42

Region F, VP Brand Building Dove

Country 4

43

Region D, VP Brand Building Dove

Country 14, 18

44

Region B, VP Brand Development – Brand Building Dove

Country 4, 7, 8

45

Region D, Brand Director Category H

Country 15, 19

46

Region D, Category VP, Product Line A

Country 15, 19

47

External Consultant – CEO Global Branding Consultancy

Country 4, 11

48

Global VP Dove Masterbrand

Country 8, 14, 19

49

Global SVP Sustainability

Country 14

50

Global VP Health & Wellbeing

Country 14

51

Region D, External Consultant – Leadership Development

Country 14

52 (4×)

Global SVP Dove, Product Lines A, B and C

Country 4, 14

53

Region B, Brand Development Dove

Country 8

54

Global External Consultant – Social Branding and PR

Country 14

55

Region B, External Consultant – PR

Country 8

56

Region B, External Consultant – PR

Country 8

57

Region F, External Consultant – PR

Country 14

58

Global External Consultant – PR

Country 4

59

Local Masterbrand Manager Dove

Country 4

60

Global Brand Director Dove, Product Line A

Country 4, 7

61

Region B, Director Consumer & Market Insight

Country 8

62

Region F, Category VP, Product Lines A, B and C

Country 4, 8, 20

63

Region F, External Consultant – Client Services Director

Country 4, 14

64 (2×)

Global Unilever Chairman 1999 – 2005

Country 11, 13, 16

65

Region B and D, Brand Development Director Dove

Country 17

66

Local Liaison Manager HR

Country 1, 11, 20

67

Global External Consultant – General Manager Advertising Agency

Country 4, 14

68

Global VP Procurement

Country 8, 14

Appendix 2: Unilever’s Transformation from a Multidomestic to a Transnational Organization

In the early post-war period, when Unilever found itself in an environment still bounded by trade barriers and local government intervention, the selection criterion was to maximize diversification for the spreading of risk (Wilson, 1954). A former Unilever Chairman clarified in an interview that managing the increasingly complex organization did not demand greater control, but rather effective delegation (interview with George Cole, Wilson, 1968, Book 3). In this period, local chairmen were the organization’s key decision-makers, responsible for all parts of the value chain. Unilever’s TMT controlled by appointing the local chairmen and by supporting them with advice and key resources.

But by the end of the 1960s, the world was changing, and Unilever’s rapidly expanding and more centralized Japanese and North American competitors seemed better placed to benefit from converging consumer habits and the lowering of trade barriers (Bartlett & Ghoshal, 1989). A break point occurred as early as 1966 when the TMT concluded that the unrestrained autonomy of national subsidiaries had become a competitive disadvantage in this globalization era of Triad competition. Local entrepreneurship had to be balanced with greater regional and/or global integration, and a more concerted effort was needed to speed up the regional and/or global roll-out of technological innovations (Bartlett & Ghoshal, 1989; Jones, 2005).

Extant literature (Bartlett & Ghoshal, 1989; Jones, 2005; Wilson, 1954, 1968) chronicles three major cycles of restructurings – in our language, a disrupting cycle followed by two reinforcing cycles – that changed Unilever from a multidomestic into a transnational organization. The disrupting cycle comprised the introduction of global category coordinators, a change Wilson (1968) describes as ‘the most impactful in Unilever’s history’ as it marked the end of half a century of local autonomy. The next cycle reinforced this break with the past by introducing a distinction between core and non-core businesses and giving more power to the coordinators who were to select the non-core businesses that were to be sold. In the third wave, selected subsidiaries were given the responsibility for regional innovation in one of Unilever’s core categories (Jones, 2005). Bartlett and Ghoshal chronicled the painful process of changing Unilever’s cultural and administrative heritage throughout these changes. Local chairmen remained the most powerful decision-makers throughout this process, but their autonomy and mandate changed significantly, and the level of local autonomy varied somewhat across subsidiaries.

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Mees-Buss, J., Welch, C. & Westney, D.E. What happened to the transnational? The emergence of the neo-global corporation. J Int Bus Stud 50, 1513–1543 (2019). https://doi.org/10.1057/s41267-019-00253-5

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