Global, national and local practices in multinational corporations: towards a sociopolitical framework

Abstract

This paper intends to shed some light on strategies and power resources of subsidiary managers and employee representatives involved in 'charter changes' and the implementation of 'best practices' developed elsewhere. Research shows that local managers face a dilemma in that they need both internal legitimacy (within the MNC itself) and external legitimacy (within the local context). We argue that the power resources key actors draw on in the (internal) decision-making processes of 'charter changes' are intertwined with certain (external) national business system (NBS) characteristics, an aspect often neglected in North-American research about MNCs.We identify three key influences, which restrain or empower local management and employees in their ability to make strategic choices and gain power within the MNC.They are (1) the overall strategic approach of the multinational group, (2) the strategic position and the economic performance of the subsidiary itself and (3) the degree of institutional embeddedness of the subsidiary in the host country. Comparative minicase studies are used to illustrate the effect of local management and employee representatives' empowerment on their ability to retain skills and work practices supportive of a diversified quality production process in the face of MNC pressure to adopt global 'best practices' based on more standardised production processes.

Learning from the world? Horizontal knowledge flows and geopolitics in international consulting firms

“…Almond and Ferner, 2006;Boussebaa and Morgan, 2008;Ferner et al, 2012;Ferner and Quintanilla, 1998;Geppert and Williams, 2006;Kostova and Roth, 2002;Tregaskis et al, 2010). This reveals that MNCs remain very dependent on home-country practices and often have little interest in learning from subsidiaries (see also Kristensen and Zeitlin, 2005), although a degree of 'reverse diffusion' is identified in some cases (see e.g.…”

“…It also shows that the parent company remains the most important source of knowledge for the organization and continues (albeit under contextual constraints) to project its knowledge onto subsidiaries rather than learn from them (e.g. Almond and Ferner, 2006;Boussebaa and Morgan, 2008;Geppert and Williams, 2006). This suggests that the modern MNC's ability to 'learn from the world' may be limited in practice.…”

Succeeding in process standardization

“…An imposed centralized mechanism increases the likelihood of emergent conflicts if it undermines existing levels of subsidiary autonomy (Geppert and Williams, 2006). Furthermore, with all necessary coordination mechanisms contained within the subsidiaries, MNCs seeking local responsiveness will rely less on standardization for coordination.…”

Managerial Coordination Challenges in the Alignment of Capabilities and New Subsidiary Charters in MNEs

“…Managers may thereby use their influence (Geppert & Williams, 2006;Geppert et al, 2003) or seek to gain HQ's attention and consideration (Bouquet & Birkinshaw, 2008) in order to shape subsidiary roles. In a qualitative cross-sectional study of eleven German HQs and their Hungarian subsidiaries, Dörrenbächer and Gammelgaard (2006) reveal how such renegotiations might be due to tensions between HQ's strategic intent, on the one hand side and subsidiary level capabilities and resource advantages, on the other.…”