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Control changes in multinational corporations: Adjusting control approaches in practice

Emma Stendahl (), Svante Schriber () and Esther Tippmann ()
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Emma Stendahl: University College Dublin
Svante Schriber: Stockholm University
Esther Tippmann: National University of Ireland Galway

Journal of International Business Studies, 2021, vol. 52, issue 3, No 4, 409-431

Abstract: Abstract The issue of control in multinational corporations (MNCs) is central to international business scholarship. However, prior literature tends to provide a static perspective offering few theoretical insights on control changes, especially the practices that enable control adjustments. Adopting a practice theory perspective, we consider control as “in the making” whereby adjustments emerge through a social accomplishment, constituted and reconstituted as headquarters and subsidiaries engage in a co-creating process. Using a longitudinal case study approach, we had the rare opportunity to track and compare an unsuccessful and a successful attempt to adjust control in an MNC over time. Our main theoretical contribution is a model of adjusting control in MNCs that details the practices that enable control changes. This model offers theoretical implications for organizational control theory in MNCs, especially in relation to theorizing the subsidiary contribution in the design of control, the reconciliation of raised tensions in headquarters–subsidiary relationships, and the nature of unintended consequences in the adjustment process. Our study also contributes to theories on MNC change, as it details the construction of an ongoing strategy–structure alignment for strategic flexibility.

Keywords: MNC; control; change; flexibility; case study; headquarters–subsidiary relationships (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1057/s41267-020-00371-5

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