Managing the Embedded Multinational

Managing the Embedded Multinational

A Business Network View

Mats Forsgren, Ulf Holm and Jan Johanson

This book expands the business network view on managerial issues in multinational corporations. Specifically, it scrutinises the importance of a subsidiary’s external and internal business network for its strategic and organizational role within the corporation.

Chapter 7: The Embedded Multinational

Mats Forsgren, Ulf Holm and Jan Johanson

Subjects: business and management, international business


In Chapter 6 we introduced the MNC as an organization consisting of several business actors with their own business networks. In Chapter 7 we continue on the same track by introducing and defining the Embedded Multinational. A special feature of the Embedded Multinational is the dual role of the individual subsidiaries, depending on the business network context and the corporate context to which they each simultaneously belong. This feature, in its turn, has a profound impact on the behavior of the MNC. The case-study firm, Danke, once again provides an illustrative example for discussion. It demonstrates how an MNC subsidiary handles the conflict between the two contexts. It shows how the subsidiary strives for influence over a product development process, and in doing so succeeds in modifying both the corporate context and the business network context. THE HETEROGENEOUS MNC In Chapters 5 and 6 we laid the foundation for applying a business network view to an MNC. This conceptualization endows the MNC with a somewhat heterogeneous character. First, the different sub-units (subsidiaries) are embedded in unique business networks encompassing other business actors inside and outside the organization. Second, differences in culture, institutional characteristics, language, etc. between the environments of the subsidiaries add to the heterogeneity of the group as a whole. Third, the actual boundaries between the MNC and the environment are diffuse. Firms are open systems, in that they influence and are influenced by the environment. But implicit in this view, irrespective of how the environment is defined, is...

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