Control in Multinational Firms: the Role of Price and Hierarchy

Jean-Francois Hennart

Chapter 7 in Organization Theory and the Multinational Corporation, 1993, pp 157-181 from Palgrave Macmillan

Abstract: Abstract How do firms manage to perform their functions efficiently? How do they constrain individual behavior to make it compatible with the overall goals of the firm? These age-old questions take on new significance in the context of the MNC (see, for example, Brooke and Remmers 1970; Doz and Prahalad 1981; Hedlund 1981, 1986; Prahalad and Doz 1981; Baliga and Jaeger 1984; Gates and Egelhoff 1986; Bartlett 1986; Welge 1987; Egelhoff 1988; Bartlett and Ghoshal 1989). In MNCs the problem of control is particularly acute. Geographical and cultural distance increase the cost of establishing control, and make it difficult for MNCs to secure the cooperation of their foreign affiliates. Overcentralization of decisions leads to paralysis, while excessive decentralization results in chaos (Doz and Prahalad 1981).

Keywords: Behavior Control; Price System; Output Control; Transfer Price; Price Control (search for similar items in EconPapers)
Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-22557-6_7

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349225576

DOI: 10.1007/978-1-349-22557-6_7

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().