The Oxford Handbook of International Business

By Alan M. Rugman; Thomas L. Brewer | Go to book overview

are the challenges facing researchers in analyzing the internationalization patterns of the emerging firms of the Internet age, some of whom engage in border-crossing activities very early in their existence.

Studies of MNE organization will therefore have to deal with two very different categories of MNE in the future: the large, established multi-country and multi-business MNEs that have for so long been the primary focus of research, and the internationalizing firms in newly emerging industries and in emerging market economies. This second category of firms is much more difficult to map; there is no equivalent of the Fortune International 500 to provide a base mailing list for questionnaires or a population from which to select 'representative' case studies. But they will grow in importance, and their analysis should build on the insights generated by decades of research on internationalization processes. Researchers must also continue to reach beyond the IB field for conceptual and theoretical tools, however—to today's more complex models of organization design, which encompass linking mechanisms and alignment systems as well as formal structures, and rules and routines as well as large-scale systems and processes. They must also recognize, as the researchers of the early 1980s did so well, that the MNE is a political system as well as an organization design, with conflicts of interest built into its configuration, and that it is also, as both the institutional theorists and the cross-cultural comparativists remind us, a social construction with many different 'constructors'. Research on MNE organization is demanding and difficult, and calls for careful selection and use of conceptual tools, but as Dick Scott has pointed out, it is one of the most influential organizational forms in the world today, and few of the questions that dominate international business today can be answered without taking MNE organization into account.


Appendix 13.1 MNE Organizational Structures

The basic models of formal MNE structure identified in the 1960s and 1970s are still relevant today. This continuity is hardly surprising: there are three basic parameters involved in 'drawing the boxes' of the organization—function, business or product, and geography. All multi-location companies must decide how to deal with all three (even domestic companies often have geographic sales territories, for example). The key structural question for the MNE is how to deal with geography, and the charts in Figures 13.5-10 provide a highly simplified view of the various architectures for doing this.

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