A Question of Legitimacy? A Dynamic Perspective on Multinational Firm Control

Bjorn Ambos, Barbara Brenner

Research output: Contribution to journalArticle

29 Citations (Scopus)

Abstract

The control and coordination of a network of geographically and culturally dispersed subsidiaries is one of the most prominent challenges in international management. However, many empirical findings on the effectiveness of various control mechanisms and combinations thereof are still counterintuitive. This study uses longitudinal case studies and cross-sectional interview data to extend control theory by examining why, how, and in what sequence large multinational firms (MNCs) implement controls in their networks of foreign subsidiaries. Our analysis draws from literature on institutional theory, embeddedness, and organizational power to demonstrate that MNC headquarters need to overcome institutional duality when implementing their controls abroad. We find that headquarters do so by using social controls, primarily as a way of legitimizing and institutionalizing their process and output controls that are implemented subsequently.
Original languageEnglish
Pages (from-to)773-795
Number of pages23
JournalOrganization Science
Volume24
Issue number3
Early online date15 Jun 2012
DOIs
Publication statusPublished - May 2013

ASJC Scopus subject areas

  • Management of Technology and Innovation
  • Strategy and Management
  • Organizational Behavior and Human Resource Management

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