MNC

• Configuration of the organisation has a stronger influence on the efficiency as each element in isolation
• Organisation is efficient and effective when consistency between organisational structure, other organisational elements (within) as well as with external environment is given

• Assumes that only specific combinations of organisational and system variables are able to survive in the long run
  • All elements (strategy, the structure of an organisation) of an organisation are mutually dependent, influence each other (positively or negatively) and only a fit between all elements can be effective and efficient

• Organization structure
• Centralization
• Formalization/Standardization

• Personal communication
• Normative integration

• Direct managerial contact
• Permanent cross-country teams
• Temporary teams (task forces)
• Integrating roles (expatriates)
• Establishing channels for informal communications (like regular meetings, conferences)

• building an organizational culture of known and shared strategic objectives and values
• clear, shared understanding of the company‘s mission
• “normative integration is the glue that holds differentiated networks together as entities called firms”

• creating commitment
• sense of identity
• providing a source of meaning
• enhancing stability of organisations, ensuring continuity

When corporate values and norms:

• are widely shared
• intensely held across all organizational units

and in the context of MNCs

• localised to a sufficient degree,
  (adapted to local conditions and understanding)

• Leadership
• Strategy
• Communication
• HR policies
• Structure and Systems
• Measurement

• Select employees whose values are compatible with those of the organisation
• Socialisation is the process through which (new) employees learn company’s values & norms, attitudes, behaviours and knowledge
• Trainings are a good “off-the-job”-opportunity to emphasize the relevance of values and concrete measures to implement them
• The rewards & recognitions are strong shapers of employees’ behaviours

Normative integration is the glue that holds differentiated networks together as entities called firms

When the subsidiary...

• belongs to a large MNC
• is highly interdependent with the other MNC units
• is responsible for more than the host market
• is owned to a high percentage by the MNC
• uses complex production technology
• is located in a host country with stable political environment

• different subsidiaries are assigned different roles
• roles can be distinguished by a small number of dimensions

• The task that a subsidiary has to fulfill within the MNC
  • Elements of the business, in which the subsidiary participates and for which it is recognized to have responsibility within the MNC

• one-sided (asymmetrical) knowledge outflows from subsidiary (knowledge providers)
• two-sided integration into knowledge flows (knowledge networkers)

• stimulation of knowledge flows by normative integration of foreign subsidiary
• facilitation of knowledge transfer by formal mechanisms

• Arbitrariness (Willkürlichkeit) in the selection of dimensions
  • different conceptual levels in the dimensions
• Over-Simplification
  • Mostly 2 dimensions, and 2 Values per dimensions-->4 Roles!
• Implicitely „top-down“ approach
  • assignment of „mandates“ or „roles“ by the headquarters
  • „autonomous“ subsidiaries could (theoretically) select and change their roles themselves

Close, long-term, mutually beneficial agreement between two or more partners in which resources, knowledge, capabilities are shared with the objective of enhancing the competitive position of each partner

• legally and (partially) economically independent partners
• coordination of behaviour
• motivation of a better effectiveness (reaching of objectives) than with individual conduct
• voluntary

• long-term purchasing agreements
• R&D collaboration teams
• licensing agreements
• joint ventures

• economies of scale/experience curve effects
• access to (complementary) resources, capabilities, skills
• reduction of risk (by dividing costs)
• influence on competitive situation
• circumvention of trade barriers
• time advantages

• Vertical disaggregation (to enhance flexibility, among other reasons)
• Shrinking product life cycles
• Environment dynamics (incl. uncertainty)
• Growing capital investment requirements
• Growing necessity to access new knowledge (e.g. for innovation)

• collective strengths
• interpartner conflicts
• Interdependencies

• cooperation vs. competition
• rigidity vs. flexibility
• short-term vs. long-term orientation

• high failure rate
• sharing of profits
• potential conflicts with the partner
• loss of control
• creation/reinforcement of a competitor

1. Decision
2. Partner selection
3. Alliance Design
4. Operation
5. Termination

1. analysis of competitive environment
2. identification of those areas of the value chain where it makes sense to collaborate
3. assessment of a cooperation as potential organisational form
4. quantifying possible costs/benefits of collaborating

Identification of (own) company objectives concerning the alliance

• not only hard factors, but also soft factors should be considered (“partner competence“ vs. “partner comfort“)
• problematic: data/information about potential partners needed, but often not available