Practice coordination by principles: a contemporary MNC approach to coordinating global practices

Abstract

Purpose In the mainstream international business literature on multinational corporations (MNCs), an authoritative central headquarter (HQ) that transfers standardised practices to its subsidiaries remains the norm. This study aims to explore how MNCs coordinate their management practices through principles. Design/methodology/approach The paper draws on empirical findings from a qualitative in-depth single case study based on evidence-rich qualitative data including observations from how a high-tech MNC headquartered in Sweden coordinates its development practices. Findings An alternative informal coordination approach (i.e. coordination by principles) is identified. Additionally, antecedents and implications of the approach are presented. Practical implications Coordination by Principles may facilitate the internalisation of practices and be a feasible compromise between context adaptation and traditional standardisation, particularly for MNCs with highly heterogeneous research and development operations. Originality/value This paper highlights the importance of acknowledging that firm practices often are based on management ideas that HQs adopt to prevent loss of legitimacy. As such, this study contributes to the scarce literature that critically questions the assumption that HQs solely transfer practices to subsidiaries to improve subsidiary efficiency and performance.

Situated between headquarters and local environment: local managers’ scope for action in training activities

“…The remarkable perceived distance, that local managers described in the interviews, raises the question whether top managers in this regard possibly are failing in their job, if we consider the notion that “international management is management of distance” (Zaheer et al , 2012, p. 19; emphasis Zaheer et al ). Local managers’ evasive manoeuvres, othering practices and activities “behind the scenes” (Fuchs and Schalljo, 2017, p. 24) indicate that there are fields of hidden conflict (see Dörrenbächer and Gammelgaard, 2011; Kristiansen and Schweizer, 2022). Top managers might reflect on the question whether communication could be improved by mutual sense-making between the international partners, including training for the international training managers. Secondly, at the same time, it must be considered that local managers interviewed stated that there is limited need for their colleagues, who work in different skill formation systems, to receive information about the peculiarities of the German skill formation system and related practices.…”

“…2. Subsidiary situated between headquarters and local contexts 2.1 Headquarters' control and local managers' scope for action Control of local managers by top management in headquarters and local managers' scope for action has attracted considerable attention in IB research (Becker-Ritterspach et al, 2010;Dörrenbächer and Gammelgaard, 2011;Dörrenbächer et al, 2021a;Kristiansen and Schweizer, 2022). The kind of control and the scope for action differs between MNCs and between the areas of activity within the MNC (Saka-Helmhout, 2011;Verbeke and Yuan, 2020).…”

“…Local managers employed in international subsidiaries of multinational companies (MNCs) have some, however limited, scope for action. This scope depends on headquarters’ control (Dörrenbächer and Gammelgaard, 2011; Dörrenbächer et al , 2021a; Kristiansen and Schweizer, 2022). In addition, the local environment limits the elbowroom of the subsidiary managers, for example, by institutional settings and local actors (Becker-Ritterspach et al , 2017; Gammelgaard and Kumar, 2023; Hutzschenreuter et al , 2016).…”

Does high-tech industry matter for marketing strategy selection? Adaptation vs. standardization on the international market

“…We can therefore assume that high-tech firms have greater possibilities and ability to differentiate their product and promotion strategy than non-high-tech firms. Kristiansen and Schweizer (2022) shed light on which company is affected by the dilemma of marketing strategy. It is because multinational corporations operate differently than international new ventures.…”