As MNE's have matched each other in production efficiency and local responsiveness, the battle has turned towards innovation
new opportunity is sensed in home country and developed there as wellafterwards it is introduced internationally through subsidiaries -Gain input of subsidiaries into centralized activities -Ensure all functional tasks are linked to market needs
Can be improved by, Transfer of responsibilities across development, production and marketing, Panasonic: Transfer People, Ensure that all functional tasks are linked to market needs, Get Input of Subsidiaries, Create links between headquarter and subsidiaries!
subsidiaries sense local opportunities and create their own solutionsPrerequisites are the splitting up of resources and the delegation of authority
Can be improved by, Empowering Local Management, Linking local managers to corporate decision-making processes, Integrating Subsidiary Functions
Special resources and capabilities of each national subsidiary are available to other units as well Product developed by one unit is sold by others as well if that is beneficial
Combine resources from center and subsidiaries Take idea from A, expertise from B and scarce resource from C or Ideas from A, B and C or any mixture to create product that is then distributed to all
Simplifying, subconscious rules
Assumption that roles of organizational units responsible for very different things should be uniform, Don't generalize what needs how much standardization!
Assumption that headquarter-subsidiary relationships should have clear patterns of dependence/independence, Build and manage interdependence, Develop integrated network, Create proper inter unit integration
Assumption that corporate management has responsibility to make decisions and control uniformly, Interdependent units require flexible coordination
complex connections through which units source their supplies and materials, link flows of components and subassemblies and distribute finished goods
Formalize as much production procedures as is feasible, Formalization of management processes
represents the major strategic choices the company makes and therefore must be controlled at corporate level
Only top-level managers can make decisions, Coordination by Centralization
Tacit = can't be formalized, Socialization of local managers