Managing the international multi-centre firm: Case studies from Sweden

The traditional theory of foreign direct investment is inadequate to explain the latest phase of the internationalization of Swedish industry. The theory does not recognize that the factors which motivate firms new to the foreign scene differ considerably from those relevant to already highly internationalized firms. The latter no longer rely on any home-based strengths. Mats Forsgren also argues that most of the literature on the management of international firms puts too much stress on hierarchies. This hierarchical view of things is not appropriate to many international forms which have changed from a centre-periphery to a multi-centre structure, with foreign subsidiaries not only developing their own objectives but their own powerful resources. In this paper an alternative model is developed which categorizes these firms as heterogeneous and political systems in a network context rather than as homogeneous and hierarchically controlled systems. The article concludes by spelling out the implications of taking such a view on the management of international firms.