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 8: Headquarters’ Potential Value-Adding by Cherry-Picking Sub-Unit Technology Development Projects

Ulf Andersson and Philip Kappen

Subjects: business and management, international business, strategic management


8. Headquarters’ potential valueadding by cherry-picking sub-unit technology development projects Ulf Andersson and Philip Kappen INTRODUCTION Later years’ writings on the multinational corporation (MNC) have underscored three views of importance for our theorizing of the organization. First, it has pictured the organization as more dispersed and diversified than was assumed in earlier views. Ghoshal and Bartlett, for instance, have argued that in MNCs, actual relationships between the headquarters and the subsidiaries and among the subsidiaries themselves tend to be more federative because . . . issues of competency and power tend to be more contested within the MNC and interdependencies among the units tend to be reciprocal as well as sequential. (Ghoshal and Bartlett 1990, p. 607) More than 25 years ago the strategic roles of sub-units (Hedlund, 1980) and the issue of complexity for headquarters to remain in control of subunits and influence the long-term strategy (Doz and Prahalad 1981) was raised. Second, scholars have also progressively interested themselves in the ability of MNCs to innovate and transfer their new technologies, not least with the current surge of intra- and inter-firm relationships (for example Darr et al. 1995; Powell et al. 1996). The implication for the MNC is that it is increasingly difficult to obtain and sustain a competitive advantage through rationalization and standardization alone. It has been proposed that those who have gained a competitive advantage over their rivals have increasingly done so through new additions in the technological portfolio and successful transfer of them, thereby providing incentives for MNCs to...

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