Control Mechanisms and Patterns of Reorganization in MNCs

Current management and organizational research seems to agree in one respect: that management faces new challenges resulting mainly from globalization, whether it is real or perceived. Clearly, national corporations as much as MNCs feel the need to respond to new market conditions by reorganizing their businesses on a permanent basis. These changes concern structural configurations as much as flows of all kinds of resources including products, people and capital. However, in our empirical research we looked more closely at such reorganizations and found that even MNCs operating in the same industry were by no means responding to the challenges of globalization in a uniform or convergent way. Despite some similar trends, the types of reorganization, as well as the way the reorganization process developed, diverged from one company to the other. Searching for answers, we found that different dominant control mechanisms were key factors in explaining the divergent patterns of reorganization. Although our research topic is only indirectly linked to the general convergence—divergence debate in the context of globalization (see Ohmae, 1990; Maurice and Sorge, 2000; Morgan et al., 2001), we may nevertheless contribute to it. As will be outlined in our chapter, our findings on the connection between control mechanisms and patterns of reorganization indicate that there is as much convergence as divergence.