See for example, LevittTheodore, “The Globalization of Markets,”Harvard Business Review (May/June 1983), pp. 92–102; PorterMichael, “Changing Patterns of International Competition,”California Management Review, 28/2 (Winter 1986): 9–40; and HamelGaryPrahaladC.K., “Do You Really Have a Global Strategy,”Harvard Business Review (July/August 1985), pp. 139–148.
2.
The research on which this article is based consisted of a three-year-long in-depth study of nine leading American, Japanese, and European multinational companies in three diverse industries. We interviewed over 235 managers in the headquarters and a number of different national subsidiaries of these companies to uncover how these companies with their diverse national backgrounds and international histories were adapting their organizational structures and management processes to cope with the new strategic demands of their operating environments. The companies studied were Philips, Matsushita, and General Electric in the consumer electronics industry; Ericsson, NEC, and ITT in the telecommunications switching industry; and Unilever, Kao, and Procter & Gamble in the branded packaged products business. The complete findings of this study will be reported in our forthcoming book Managing Across Borders: The Transnational Solution to be published by the Harvard Business School Press.
3.
For a more detailed explication of the decentralized federation and centralized hub forms of multinational organizations, see BartlettChristopher A., “Building and Managing the Transnational: The New Organizational Challenge,” in PorterMichael E., ed., Competition in Global Industries (Boston, MA: Havard Business School Press, 1986).
4.
“Rebuilding Corporate Empires—A New Global Formula,”Newsweek, April 14, 1986, p. 40.
5.
The concept of administrative heritage is explained more fully in Christopher Bartlett (op. cit.) and also in BartlettChristopherGhoshalSumantra, “Managing Across Borders: New Strategic Requirements,”Sloan Management Review (Summer 1987) pp. 7–17.
6.
The organization we describe as the transnational has a long but discontinuous history in the international management literature. The concept of such an organizational form was manifest in Howard Perlmutter's celebrated paper, “The Torturous Evolution of the Multinational Corporation,”Columbia Journal of World Business (January/February 1969), pp. 9–18. Similarly, PrahaladC.K.Doz'sYves idea of a multifocal organization is described in The Multinational Mission: Balancing Local Demands and Global Vision (New York, NY: The Free Press, 1987); Gunnar Hedlund's definition of the heterarchy in “The Hypermodern MNC—A Heterarchy?”Human Resource Management (Spring 1986), pp. 9–35; and WhiteRoderickPoyneter'sThomas description of the horizontal organization in “Organizing for Worldwide Advantage,” presented at the seminar on Management of the MNC at the European Institute for Advanced Studies in Management, Brussels, on June 9–10, 1987, are conceptually similar to what we describe as the transnational organization, though the models differ significantly in their details.
7.
Westney and Sakakibara have observed a similar system of internal quasi-markets governing the interface between R&D and operating units in a number of Japanese computer companies. See WestneyEleanorSakakibaraK.“The Role of Japan-Based R&D in Global Technology Strategy,”Technology in Society, No. 7, (1985).
8.
See RosenbloomRichardCusumanoMichael, “Technological Pioneering and Competitive Advantage: Birth of the VCR Industry,”California Management Review, 29/4 (Summer 1987): 51–76, for a full description of this interesting development process.
9.
See Van MannenJohnScheinEdgar H., “Toward a Theory of Organizational Socialization,” in StawBarry, ed., Research in Organizational Behavior (Greenwich, CT: JAI Press, 1979) for a rich and theory-grounded discussion on how such differences in socialization processes and career systems can influence managers' attitudes towards change and innovation.
10.
See BartlettChristopherYoshiharaHideki“New Challenges for Japanese Multinationals: Is Organizational Adaptation Their Achilles' Heel?”Human Resource Management, 27/1 (Spring 1988): 1–25, for a fuller discussion of some of the personnel management implications of managing local nationals in a classic centralized hub Japanese organization.
11.
The need for both feasibility and desirability for facilitating innovativeness of organizations has been suggested by MohrLawrence, “Determinants of Innovation in Organizations,”American Political Science Review, 63 (1969).
12.
For a detailed discussion of how managers make such choices and how new responsibilities and relationships are developed, see BartlettChristopherGhoshalSumantra, “Tap Your Subsidiaries for Global Reach,”Harvard Business Review (November/December 1986), pp. 87–94.
13.
The effectiveness of personnel transfers as an integrative mechanism in multinational companies has been highlighted by many authors, most notably by EdstromE.GalbraithJ.R., “Transfer of Managers as a Coordination and Control Strategy in Multinational Organizations,”Administrative Science Quarterly (June 1977).
