A Question of Legitimacy? : A Dynamic Perspective on Multinational Firm Control
Journal
Organization Science
ISSN
1047-7039
ISSN-Digital
1526-5455
Type
journal article
Date Issued
2013-06
Author(s)
Abstract
The control and coordination of a network of geographically and culturally dispersed subsidiaries is one of the most prominent challenges in international management. However, many empirical findings on the effectiveness of various control mechanisms and combinations thereof are still counterintuitive. This study uses longitudinal case studies and cross-sectional interview data to extend control theory by examining why, how, and in what sequence large multinational firms (MNCs) implement controls in their networks of foreign subsidiaries. Our analysis draws from literature on institutional theory, embeddedness, and organizational power to demonstrate that MNC headquarters need to overcome institutional duality when implementing their controls abroad. We find that headquarters do so by using social controls, primarily as a way of legitimizing and institutionalizing their process and output controls that are implemented subsequently.
Language
English
Keywords
control dynamics
legitimacy
multinational firms
international strategy
longitudinal study
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
INFORMS
Publisher place
Hanover
Volume
24
Number
3
Start page
773
End page
795
Pages
23
Subject(s)
Division(s)
Eprints ID
218056