Table of Contents

Managing the Contemporary Multinational

Managing the Contemporary Multinational

The Role of Headquarters

New Horizons in International Business series

Edited by Ulf Andersson and Ulf Holm

Managing the Contemporary Multinational explores the role of headquarters in different structures of multinational firms and shows how this role is affected by the complexity of contemporary research.

Chapter 2: Beyond Heterarchy: Emerging Futures of the Hypermodern MNC

Ivo Zander and John A. Mathews

Subjects: business and management, international business, strategic management

Extract

Ivo Zander and John A. Mathews INTRODUCTION It is now over 20 years since Gunnar Hedlund (1986) launched the idea of the hypermodern MNC. It was at the time a radical and future-oriented interpretation of the changing nature of the multinational corporation, condensing contemporary developments in the global environment and firm-related evolutionary processes into a set of propositions or imperatives for the well-established multinational. According to the heterarchical principles of organizing and managing the modern MNC, firms were expected to exhibit increasingly differentiated, fluid and egalitarian networks of internationally dispersed subsidiaries and affiliates. Supported by coordination through normative rather than calculative or coercive/ bureaucratic control, strategy formulation and innovation processes were increasingly to be in the hands of capable and interconnected units in the multinational network. While the term heterarchy was originally conceived to describe organizational characteristics, in the international business literature the term has become synonymous with a distinct and what many perceive as ultimate form of multinational corporation, the heterarchy.1 While many of Hedlund’s (1986) predictions accurately foreshadowed developments in many well-established multinationals, it was an account of a specific breed of firm absorbing the impact of largely external environmental changes. If anything, the pace of change has accelerated since, invoking new constraints, opportunities and strategic challenges for the multinational corporation. In this forward-looking and in parts also speculative chapter, we continue the discussion on the ultimate form of the hypermodern MNC, suggesting a typology of new subtypes of multinationals that accounts for their degree of openness of...

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