Abstract
The tendency to treat ‘the organization’ as a unitary agent runs through much of contemporary analysis in strategic organization theory. An earlier concern for intra-organizational conflict now tends to be re-cast in guides to the lubrication of frictional inter-faces or as constituting ‘implementational deficits’ in the design of strategic change (Kotter, 1995). Its analytical significance may, indeed, be seen to evaporate in the face of what are seen to be inexorable isomorphic pressures towards strategic conformity across inter-organizational fields. Yet other perspectives view social networks as rapidly expanding modes of work organization, eroding hierarchy and allowing widely emancipating effects on participatory performance. Within the theoretical framing of the academic field of International Business (IB), the analytical disregard for intra-organizational conflict has, until recently, tended to be even more pronounced. The field’s origins in the economic analysis of international trade has provided IB analysts with an overriding and continuing concern for the functional effectiveness of the multinational corporation (MNC) as an agent in the creation of global markets. This frame can be seen to circumscribe ontological perspectives on the tensions that pervade the ongoing process of negotiating dependency relations between the head-office (HQ) of the parent firm and its foreign subsidiaries or affiliates.
IB’s narrowly rationalist view of resource dependency and of the subsidiary’s agency role has been the subject of a developing critique that is well represented in the work of Christoph Dörrenbächer and Mike Geppert (2006) and others. Particularly associated with research at the universities of Groningen and Surrey, it now extends across a broadening range of organizational theorists including comparative institutionalists such as Kristensen and Zeitlin (2005). The former two scholars are editors of a new collection of research and theory entitled Politics and Power in the Multinational Corporation. In their Part I introductory chapter they describe the collection as representative of an ‘emergent critical perspective’ (p. 5). Besides critiquing the rationalistic apolitical approach of mainstream IB scholars, Geppert and Dörrenbächer target the analytical frames of both North American neo-institutionalism and European comparative institutionalism – the first for its disregard for institutional distance, the second for its neglect of social agency and its use of static configurations. They propose that ‘MNCs are indeed social constructs enacted by powerful actors which bring diverse and sometimes contradictory “contextual rationalities” into play when contesting and negotiating the methods and degrees of local adaptations’ (p. 23). And, ‘In short, power relations are context-specific (institutional and culturally shaped but not determined) and interactively and discursively constituted by actors with specific identities and interests (subjective)’ (p. 27). In Part III of the book Blazejewski and Becker-Ritterspach present a more extensive appraisal of the existing literature on intra-organizational conflict which allows a provocative categorization of alternative approaches to the analysis of power/conflict relations within the existing MNC literature. Both discussions put a concluding emphasis on the analysis of conflict as the ‘common sine qua non of organizational life’ (p. 171). It is seen as evidence of power generated in everyday relational flux in the way presented by critical cultural theorists such as Clegg, Courpasson and Phillips (2006).
The more eclectic stance taken by the editors towards other contributions to their book provides the reader with a diversity of theoretical and methodological perspectives on intra-organizational relations within the MNC. Most chapters focus on one or more case studies of conflictful events and processes, latterly on corporate acquisition and the subsequent reorganization of the acquired subsidiary. Contributors display varying levels of concern for amicable outcomes from HQ-subsidiary negotiations and for the ‘functional’ effectiveness of conflict resolution. Other cross-cutting relations with layers of international and local stake-holders, including outsourced suppliers and alliance partners, are generally seen as playing only a minor and intermittent part. Paradoxically, then, the attractiveness of the book lies as much in the diversity of approaches taken by contributors to a narrow but centrally significant area of internal organizational relationships in MNCs as in the critical positioning of their theoretical stance.
Chapters are loosely organized around three layers of socio-political structuration. Part II consists of three chapters on macro-level national and international institutional contexts. Part III contains a further three chapters on meso-level HQ-subsidiary politicized relationships. Part IV has four chapters on localized relationships described as ‘game-playing’ in the introduction and as ‘identity work’ in the section head. A fifth part returns to macro-analysis with a chapter by Morgan on the manner in which the emergent contextual institutional shaping of the MNC impacts upon internal relationships. The content of the three central parts of the book might be described in terms taken from the editors’ past work (2006). At macro-level the focus is on institutions perceived as ‘resources’; at meso-level, on the mobilization of emergent ‘interests’; and at micro-level on the constructed ‘identities’ of collective actors.
The opening case study chapter by Sorge and Rothe focuses on the external rivalry between two aero-engine firms, a British Rolls Royce subsidiary and the native German MTU, in establishing productive relationships within the vicinity of Berlin. As in the second chapter by Williams and Geppert, their analysis supports a contention that integrative relationships shaped by institutions of co-ordinated market economies like Germany (Hall and Soskice, 2001) enables effective subsidiary collaboration with others. In the first case study this is for the purpose of product innovation, in the second for internal concession bargaining between subsidiary and HQ. A contrast is made with the lack of availability of such contextual relational resources in liberal market economies. In the third chapter Fenton-O’Creevy, Gooderham, Cerdin and Renning analyse sources of differential success in the transfer of ‘performance management practices’ across subsidiaries of two MNCs located in 12 different foreign countries. They portray these control systems as forms of transported knowledge facing political and cognitive hurdles in local translation (Czarniawska and Joerges, 1996). They find ‘that the greatest success in translating the talent management process into new settings was achieved where the managers responsible for implementation had identities which spanned local subsidiary and the wider organization’ (p. 131).
Chapters 6, 7, and 8 offer analyses based on single longitudinal in-depth case studies; the first two accounts are triangulated with results from multi-firm interview samples. All focus on the manner in which the focus of HQ-subsidiary conflict can move during and between temporal episodes as a result of shifts in the relational postures adopted by each party towards the other. Schotter and Beamish’s account of their four stage longitudinal investigation leads them to propose a layered taxonomy of the sources, levels and forms of ‘dysfunctional rejection tactics’ (p. 215) deployed by subsidiaries in the face of HQ’s shifting perceptions of the sources of conflict. Dörrenbächer and Gammelgaard describe three episodes in the relationship between two telecommunications suppliers, in which one – the German group Siemens – acquires the other – the Budapest-based Telefongyár. The autonomous operation, or ‘charter’, of the Hungarian plant is reduced over a 12-year period before its final closure. The narrative again allows the construction of a typology of movement between open conflict and agreement between the parties.
In Chapter 8 Schmid and Daniel adopt Katz and Kahn’s (1978) description of organization as an open-system of roles in analysing the course of conflict arising from ‘perception gaps’ regarding the retention of prevailing management practices by a Turkish auto-component supplier acquired by a German MNC. The latter’s growing familiarity with the utility of the practices of its new subsidiary brings about an adjustment in the perceived roles of both parties. Earlier, in introducing this section, Blazejewski and Becker-Ritterspach commented that the connection between different elements in the conflict process set out in discrete two-party incident studies such as these ‘still remains in part hazy’ (p. 180). There may well be a case for a more extensive regard for the perceived long-term nature of relationships between the parties – or for ongoing constitutive sources of conflict between them – and for the actors’ own perceptions of the several constituencies from which they draw their authority within the described events.
The authors of the latter two chapters use case studies located in neighbouring societies within Central and Eastern Europe, as does Koveshnikov in Chapter 11 and Maclean and Hollinshead in Chapter 12 of Part IV of the book. Critically, the corporate acquisitions described in all four cases can be seen as following from the collapse of broader institutions in the socio-political context of the acquired Eastern European subsidiary. Koveshnikov’s study focuses on identity construction among Russian managers of subsidiaries acquired or established by Finnish parents. Maclean and Hollingshead describe the evolving responses of management in a Serbian organization to its acquisition, re-organization and eventual closure by a Turkish MNC. For this reviewer the rich ideographic analysis of identity construction presented in these chapters fulfils the manifesto of the editors most successfully. It also provides vivid evidence of expressions of ‘cultural distance’ between actors in closely neighbouring territories. These bear the imprint of long histories of wider boundary conflicts and of the related construction of ethno-nationalistic myths and stereotypes in the banalities of everyday relationships.
In Chapter 10 Ybema and Byun explore the manner in which the use of ‘identity talk’ by Dutch and Japanese managers in a subsidiary of a Japanese MNC located in the Netherlands is used to define significant aspects of their task orientations and work relationships by reference to the ‘other’. Their selection of signifiers and those expressed by HQ executives are constructed by the researchers from their recorded interview data collected locally and with HQ executives. In his earlier Chapter 9, Williams uses Hofstede’s (1980) measures of host-country culture to explore the extent to which these ‘values’ or action-orientations subscribe to the level of socio-political influence exercised by subsidiary management in extending their sphere of influence. A multi-factorial model constructed from questionnaire data collected from middle managers across 150 MNC subsidiaries produces a positive answer. (In both of these latter two chapters the continued use of the term ‘masculinity’ to describe Hofstede’s measure of pro-active ‘values’ seems archaic.)
Morgan’s concluding chapter produces several novel insights into the contingent structures and processes that shape micro and meso-relationships within ‘the transnational space’ of the MNC (p. 417). Among these, his reminder of the existence of the MNC as a corporate ‘unified legal and financial entity’ might be considered to be most telling. As Kristensen and Zeitlin’s earlier study (2005) demonstrates, for many of the involved company employees the HQ-subsidiary conflict is likely to be a relatively short spectacle before the constitutive MNC disappears from their life-world altogether – a legal and financial ‘commodity’ judged by the criteria of a different global game. Entry to this wider arena appears to require a career trajectory that moves both upwards and outwards into elite transnational communities for whom the discourse of financial marketization provides an increasing source of justification for executive action.