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Redundancies in External Relationships of Multinational Corporations — A Firm-Level Conceptual Model

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The Changing Geography of International Business

Part of the book series: The Academy of International Business ((AIB))

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Abstract

The conceptualization of the multinational corporation (MNC) as a differentiated network suggests that the subsidiaries’ level of embeddedness in their local environment is crucial, as it is the basis for subsidiary-specific advantages and entrepreneur ship (Andersson et al., 2002; Frost, 2001). In addition to possessing important resources, the subsidiaries of a differentiated MNC are conceptualized as being relatively autonomous and powerful, striving at least in part for their own goals (Birkinshaw, 1997; Hedlund, 1986; Nohria and Ghoshal, 1997; Rugman and Verbeke, 2001). The headquarters’ (HQ’s) role is to design differentiated coordination and control mechanisms to ensure that the MNC acts as a differentiated but integrated network of units (Nohria and Ghoshal, 1997). However, this HQ role is very difficult to fulfil if not contradictory. Especially critical is the underlying assumption that HQs have knowledge about a large variety of subsidiary contexts, and that they are able to and possess the power to orchestrate and manage the differentiated network (Björkman and Forsgren, 2000; Holm et al., 1995).

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Author information

Authors and Affiliations

  1. Department of Strategic Management and Globalization, Copenhagen Business School, Denmark

    Phillip C. Nell (Assistant Professor) & Ulf Andersson (Professor of Strategy and International Management)

  2. Institute of Management, University of St. Gallen, Switzerland

    Björn Ambos (Chaired Professor of Strategic Management and Director)

Authors
  1. Phillip C. Nell
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  2. Ulf Andersson
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  3. Björn Ambos
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Editor information

Editors and Affiliations

  1. University of Liverpool Management School, UK

    Gary Cook (Senior Lecturer in Applied Economics and Head of Economics, Finance and Accounting) & Jennifer Johns (Senior Lecturer) (Senior Lecturer in Applied Economics and Head of Economics, Finance and Accounting) &  (Senior Lecturer)

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© 2013 Phillip C. Nell, Ulf Andersson and Björn Ambos

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Nell, P.C., Andersson, U., Ambos, B. (2013). Redundancies in External Relationships of Multinational Corporations — A Firm-Level Conceptual Model. In: Cook, G., Johns, J. (eds) The Changing Geography of International Business. The Academy of International Business. Palgrave Macmillan, London. https://doi.org/10.1057/9781137277503_11

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