"THE MULTINATIONAL CORPORATION AS ANETWORK: PERSPECTIVES-FROMINTERORGANIZATIONAL THEORY"

bySumantra GHOSHAL*

Christopher A. BARTLETT**

N° 88 / 28

* Sumantra GHOSHAL, Assistant Professor of Business Policy,INSEAD, Fontainebleau, France

** Christopher A. BARTLETT, Harvard Business School, USA

Director of Publication :

Charles WYPLOSZ, Associate Deanfor Research and Development

Printed at INSEAD,Fontainebleau, France

The Multinational Corporation as a Network:Perspectives from Interorganizational Theory

SUMANTRA GHOSHALINSEAD

Boulevard de Constance77305 Fontainebleau, France

(1) 6072-4000

CHRISTOPHER A. BARTLETTHarvard Business SchoolSoldier's Field, Boston

MA 02139, USA(617) 495-6308

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The Multinational Corporation as a Network:

Perspectives from Interorganizational Theory

Abstract

A multinational corporation consists of a group of

geographically dispersed and goal disparate organizations that

include its headquarters and the different national subsidiaries.

Such an entity can be described as an interorganizational network

that is embedded in an external network consisting of all the other

organizations with which the different parts of the multinational

have to interact. Based on this conceptualization, the paper

develops a model of the multinational as an internally

differentiated interorganizational network, and proposes some

hypotheses that relate certain attributes of the multinational,

such as resource configuration and centrality, to certain

structural properties of its external network.

In a recent review of the literature on organizational aspects of

multinational corporations (MNC's), Martinez and Jarillo (1987) presented a

list of 82 research-based publications that, according to the authors, was

merely an enumeration of "key studies" and did not constitute an exhaustive

inventory of all academic work on this topic. Of these 82 publications, 53

have appeared within the last 10 years. In other words, this topic has

received a significant amount of attention from researchers, and not

surprisingly, given the increasing importance and visibility of multinationals

both as key economic actors and as forces of social change (Stopford, 1983:

Dymsza, 1984; Root, 1984), and the opportunity they provide to the social

scientist for exploring one of the most complex organizational forms that

currently exist.

A careful review of this literature may, however, generate some mixed

feelings about its theoretical and normative contributions. On the one hand,

a few studies and conceptualizations such as those by Perlmutter (1969),

Stopford and Wells (1972), and Prahalad and Doz (1987) have contributed simple

yet powerful frameworks that have helped both academics and managers develop a

better understanding of environmental and organizational factors that

influence choice of basic structures and decision making processes in MNC's.

On the other hand, an overwhelming majority of the studies have focused on

minor modifications to these frameworks that have had very limited theoretical

or practical import. With very few exceptions (e.g., Bartlett, 1982; Leksell.

1981; Prahalad and Doz, 1981), most effort has been expended on building

contingency frameworks for explaining differences in different structural

attributes of MNC's, but such effort has been non-cumulative because of

inconsistencies and contradictions in findings across studies: variables that

have been found in one study to have positive correlations with particular

structural aspects such as centralization, have been found to have no effect

or even negative effect in others (Gates and Egelhoff, 1984). Besides, the

overall theoretical apparatus that has been constructed has generally proven

to be too static to deal with issues such as evolution, stability and change

in MNC organizational structures and processes (Bartlett, 1982).

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The objective of this paper is to propose that a new vitality can be

infused into academic research on this topic if the underlying theoretical

anchor is broadened from the current exclusive dependence on the

intraorganizational approach and, more specifically, on the contingency models

that dominate this approach, to greater openness toward another strand of

organization theory, namely, the concepts of action-sets and networks that are

more commonly used for exploring interorganizational phenomena (Evan, 1967;

Aldrich and Whetten, 1981). We believe the interorganizational approach to be

theoretically more appropriate because its constructs match more closely the

nature and level of complexity of the phenomenon that is under investigation.

Multinational companies are physically dispersed in environmental settings

that represent very different economic, social, and cultural milieu (Robock et

al, 1977; Fayerweather, 1978; Hofstede, 1980); are internally differentiated

in complex ways to respond to both environmental and organizational

differences in different businesses, functions, and geographic locations

(Bartlett and Ghoshal, 1987; Prahalad and Doz, 1987); and, as a result of such

dispersal and differentiation, possess internal linkages and coordination

mechanisms that represent and respond to many different kinds and extents of

dependency and interdependency in inter-unit exchange relationships (Ghoshal

and Nohria, 1987). The concept of a network, both as a metaphor and in terms

of the tools and techniques of analysis it provides, is better equipped to

deal with such complexity in comparison to the corresponding constructs and

tools that are available from more traditional approaches of organizational

analysis.

As suggested by Aldrich and Whetten (1981), interorganizational

groupings such as organization sets or networks are constructs created by an

investigator and the relevant issue is not whether a multinational corporation

indeed exists in the form of a network, but how might such a conceptualization

be useful for analyzing different attributes of such organizations.

Therefore, the main thrust of our arguments in this paper is directed at

showing the potential advantages that the interorganizational approach can

provide in investigating organizational characteristics of MNC's, illustrating

some of the new concepts and hypotheses that can be imported into the process

of inquiry by such a change in the underlying theoretical infrastructure, and

highlighting the relevance and practical significance of those hypotheses.

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Interorganizational Theories Applied to the Multinational Corporation

In defining the interorganizational field as a focus of investigation.

Warren (1967) developed a typology of organizational contexts that

distinguished between the ways in which organizational units interact. These

were labeled unitary, federative, coalitional, and social choice. Instead of

being discrete categories, these contexts were proposed to vary in ordinal

fashion in the direction from one extreme - The unitary, to the other - social

choice, along a number of dimensions such as relations of units to an

inclusive goal, locus of decision making and authority, and prescribed

collectivity orientation of units.

A number of theoretical perspectives have emerged in the discussion of

interorganizational relations such as the exchange theoretic approach (Levine

and White, 1961; Emerson, 1962, 1975; Aiken and Hage, 1968; Cook, 1977), a

resource dependency model (Aldrich, 1976; Pfeffer and Salancik, 1978), a

political economy perspective (Benson, 1975) and a Marxian dialectic approach

(Zeitz, 1980). Despite the general theoretical scope of these perspectives,

their empirical applications have largely been limited to contexts that range

from federative to social choice. Thus, studies have focused on such linkages

as among social service organizations (Van de Ven and Walker, 1984),

federative structures such as the United Way (Provan, 1982), Universities

(Pfeffer and Salancik, 1974), and local governments (Bacharach and Aiken,

1976). Interaction contexts that range from Unitary to federative have been

excluded from the domain of interorganizational enquiry and placed in the

domain of interorganizational analysis (Cook, 1977). As such, the

relationships between different units of diversified business organizations

such as the multidivisional or multinational corporation have rarely been

examined from an interorganizational perspective.

One consequence of such a research approach has been that much of the

existing analysis of such complex and often dispersed business organizations

has been limited by a relatively narrow conceptualization of an "organization"

and its relevant "environment". According to Nohria and Venkatraman, this

limitation has stemmed mainly from the tendency of researchers toward "(i)

general categorization of an organization in formal distributional (e.g.,

organization chart, division of responsibility, authority, etc) and categorial

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(e.g., centralized versus decentralized, mechanistic versus organic,

differentiated versus integrated, etc.) terms as opposed to relational terms

(i.e., actual interaction patterns based on both internal and external flows

of goods, information and authority) and (ii) their abstraction of the

environment as a source of undefined uncertainties (e.g., volatility,

turbulence, resource scarcity, etc) as opposed to a field of specific

interacting organizations which locate the source of these contingencies"

(1987:2).

In contrast to this limitation of traditional intraorganizational

analysis, the dominant construct in most interorganizational theories is an

exchange relation (e.g., Ax and By) which may be defined as consisting of

"transactions involving the transfer of resources (x,y) between two or more

actors (A, B, ..) for mutual benefit" (Cook, 1977:64). Furthermore, as Cook

observes (1977:63), "The term actor in the theory refers not only to

individuals but also to collective actors or corporate groups [thus making] it

uniquely appropriate when organizations or subunits of organizations are used

as the primary unit of analysis".

From this perspective of interorganizational theory, a multinational

corporation can be conceptualized as a network of exchange relationships among

different organizational units including the headquarters and the national

subsidiaries that are collectively embedded in what Homans (1974) described as

a structured context. Further, following Tichy, Tushman, and Fombrun (1979),

we can also visualize this network as embedded in an "external network"

consisting of all the organizations such as customers, suppliers, regulators,

and competitors with which the different units of the multinational have to

interact. And, as suggested by Benson (1975) and empirically supported by

Provan, Beyer and Kruytbosch (1980), different attributes of the multinational

network can then be related to selected attributes of this external network on

which the company is dependent for its survival. A relatively clear

exposition of this concept is the main agenda of this paper. However, before

proceeding with such analysis, certain concepts and terms must be defined and

related to their theoretical origins.

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Terminology

Let us consider a multinational corporation M with operating units in

countries A, B, C, D, E, and F, and a focal organization in the corporate

headquarters HQ. Note that HQ serves as a coordinating agency and plays the

role that Provan (1983) described as belonging to the "Federation Management

Organization (FMO)" and must, therefore, be clearly distinguished from the

organizational unit (say A) that is responsible for operations in the home

country of M, even though the two may be located in the same premises. By the

term "multinational network" we shall refer to all the relationships and

linkages that exist among the different affiliated units of M, i.e., among A,

B, C, D, E, F, and HQ.

Each of the affiliated units of M is embedded in an unique context

and, hence, has its unique action set (Aldrich and Whetten, 1981). For

example, the unit A has relationships with a specific set of suppliers [GA],

buyers [b A ], regulatory agencies [r A ], and competes for resources with an

identifiable set of competitors [c A ]. Collectively, the group consisting of

[s A , bA , rA , cA , etc] constitute what we shall call the "action set" of A and

refer to as [ASA].

Different members of the action set [ASA] may be connected by ties

that many be strong or weak, resulting in different levels of cohesiveness

within the group (O'Reilly and Roberts, 1977). By the term "connectedness

within the action set" we shall refer to the extent of such cohesiveness among

members within the different action sets such as [ASA ], [ASB ], etc.

These different action sets of the different affiliated units of M may

themselves be interconnected through different coercive, normative, or mimetic

ties (Dimaggio and Powell, 1983). By the term "connectedness among the action

sets" we shall refer to the extent of such interlinkages among the different

action sets such as [ASA ], [ASO, etc.

Because of such physical, cognitive, affective or other interlinkages

among the different action sets, all members of all the action sets of the

different affiliated units of M collectively constitute what we shall describe

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as the "external network" within which the multinational network is embedded

(Tichy, Tushman, and Fombrun, 1979). The external network will therefore be

the population of all organizations that enter into exchange relations with

one or more affiliated units of the multinational. Some of the members of

this external network may be connected directly, while some others may be

connected indirectly.

Our main thesis in this paper is that different attributes of the

multinational network can be explained in terms of selected attributes of the

external network. As argued by Benson (1975), the interactions within a

network are best explained at the level of resource exchange. This suggests

two attributes of the multinational network as particularly relevant to our

analysis: (1) The configuration of resources within the network, and (2) The

structural characteristics that mediate internal exchange relations and

continually restructure the resource configuration (Zeitz, 1980).

Resources such as production equipments, finance, technology, market-

ing skills, and strategic or management capabilities may be located in any one

or more of the different affiliated units of M. By the term "resource confi-

guration" we shall refer to the way in which the resources of M are distri-

buted among A, B, C, D, E, F, and HQ. In particular, we will discuss two

aspects of resource configuration, namely, dispersal and specialization. The

former refers to' the extent to which the company's resources are concentrated

in one unit versus dispersed among the different affiliated units; the latter

represents the extent to which the resources located in each unit is differen-

tiated from those in others.

As for structural characteristics, prior research has identified a

number of attributes that are relevant for analysis at nodal, dyadic, triadic

or network levels (Fombrun, 1982; Pearce and David, 1983). We shall not

attempt a comprehensive discussion of all these relevant attributes, but will

limit our attention to only one, namely, centrality. By this term we shall

refer to the degree to which relations within the multinational network are

guided by the formal hierarchy (Tichy et al, 1979). We choose this attribute

primarily because it corresponds to the structural characteristic of centrali-

zation that has been perhaps the most analyzed attribute of multinational

organizations and therefore provides a basis for directly relating our

analysis to a large body of empirical findings that are available in the

existing literature.

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Resource Configuration in HtiCs

Resource configuration in MNC's has traditionally been analyzed from

an economic perspective, with the assumption that resource location decisions

are primarily based on the desire to minimize costs (Hirsch, 1976) and risks

(Lessard and Lightstone, 1986). Explanations of both dispersal and

specialization have therefore focused on economic factors such as differences

in the costs of inputs (e.g., Stevens, 1974), the potential benefits of

portfolio diversification (e.g., Jacquillat and Solnik, 1978), and potential

scale economies in different activities (e.g., Porter, 1985).

We present here an alternative analytical framework that relates

dispersal and specialization of an MNC's resources to the extents of

connectedness within and among the action sets of its different affiliated

units. While the constructs we use are not those that are typically used for

economic analysis, we believe it might be possible to relate them. For

example, stucture of the domestic industries in different countries,

including the extent of horizontal and vertical integration, has been proposed

in the economic literature as an important determinant of a multinational's

resource configuration (Caves, 1982). High levels of connectedness in the

local action sets can clearly lead to such integration, formal or tacit, and

thereby provide a theoretical link between our arguments and the substantial

body of economic literature Caves reviews. Similarly, imperfections in the

world's factors, goods, and intermediate product markets have been proposed in

economic theory as a key determinant of foreign direct investment (see review

in Calvet, 1981). Interconnections among the different action sets can reduce

these imperfections, and our hypotheses on the consequences of high

connectedness in the external network, derived largely from interorganization

theory, are not inconsistent with the consequences of decreasing market

imperfections suggested by economic theory. Kogut (1986) has already

presented an well argued case, grounded principally in the economic

literature, on how the inter-institutional set-up in different countries might

affect the strategic actions of MNC's. Our analysis is rooted in a view very

similar to his, and has indeed been influenced strongly by his work.

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Connectedness Within Each Action Set

As described by Westney and Sakakibara (1985), some countries such as

Japan may be characterized by much stronger and denser linkages among the

suppliers, producers, regulators, customers, etc. involved in a particular

field of industrial activity compared to other countries where such linkages

may be weaker due to economic, legal, sociological, cultural, or historical

reasons. Such linkages among the different actors may be established and

maintained through many different mechanisms such as interlocking boards of

directors, cross-holding of equity, institutionalized systems of personnel

flows, long term contracts and trust-based relationships, and mediating roles

of gatekeeping organizations such as trade associations, banks, and

consultants (see, for example, the collected essays in Evan, 1976).

In locations where the local action sets are strongly interconnected,

the local units of the multinational would require all the complementary

resources that are necessary to interface with all members of their action

sets. If they have only one or the other kind of resources such as only

research, or manufacturing, or marketing facilities, they will not be accepted

within the action sets since strong and multiplexed ties among the other

members will lead to exclusion from the sets of those who cannot establish

equally strong and multiplexed ties with each member. This argument follows

from the effects of strong ties in a network described by Granovetter (1973)

while establishing his thesis about the strength of weak ties. The strength

of ties within the local action set raises the entry barriers, and therefore

requires greater resource commitments on the part of a company that wants to

operate in the market (Caves, 1982). At a more practical level, Westney and

Sakakibara's (1985) study on the R&D activities of Japanese and American

computer companies illustrates the proposed effects of connectedness in local

action sets. According to these authors, the Japanese R&D centers of some of

the American computer companies could not tap into local skills and

technologies because the absence of associated manufacturing and marketing

activities prevented the isolated research establishments from building

linkages with the local "knowledge networks" that were embedded in the strong

and dense connections among different members of the action set for the

computer business in Japan.

Therefore, in locations where the local action sets have high

connectedness, the MNC will locate a full range of resources at the

appropriate level so that its local units can act as independent and

autonomous organizations that are fully paid-up members of the local action

sets. As a result, high levels of internal connectedness within the different

local action sets of the affiliated units of the multinational will lead to a

high level of dispersal of the company's resources, but low levels of

specialization since each unit must have all the resources that are necessary

for carrying out all related activities. Hence,

Hl: Connectedness within action sets will be positively

associated with dispersal and negatively associated with

specialization in the configuration of resources in a

multinational.

Connectedness Among Different Action Sets

In a world that some authors have characterised as a global village

(Levitt, 1983), the different action sets in different locations can

themselves be mutually interlinked through physical or normative ties. For

example, a particular customer of B may actually be an affiliated unit of

another multinational company, and other units of M such as C, D, and E may

also be serving that company's affiliated units that are part of their local

action sets. These different affiliated units of a multinational customer may

engage in such activities as comparative evaluation of prices and terms of

supply offered by B, C, D, and E, and may also demand overall commonalities in

the conditions of their exchange relationships with the different units of M

(Terpstra, 1982).

Similarly the actions of regulatory agencies in one location (say, rA)

may influence the actions of their counterparts in other locations (say r8).

Such influence may be manifest in action such as retaliation by r B to what is

seen as protectionist actions of r A , or deregulation by r B to reciprocate or

just emulate similar action by rA (Mahini and Wells, 1986). Such physical or

normative linkages may also exist among suppliers and competitors. In fact,

much of the current literature on the strategic and organizational choices of

multinationals considers such linkages among competitors as a key factor for

explaining different aspects of MNC behaviors and performance (Hamel and

Prahalad, 1983; Porter, 1986).

A low level of connectedness among the different external action sets

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will typically be the consequence of factors such as lack of transportation

and communication facilities or regulatory barriers and the same factors will

also prevent internal flows of goods, people or information among the

different units of the multinational (Chandler, 1986). In the extreme case of

total absence of any connections, a multinational company might not exist in

that business since it would have no advantages over separate domestic

companies in each environment. In the more typical case of low connectedness

when only a few members of the different action sets might share weak ties, a

multinational might exist but its resources will tend to be highly fragmented

and dispersed among the different units so that each can carry out all related

activities more-or-less independently on a local-for-local basis. In the

normative literature, this context and the resulting dispersed and

unspecialized configuration of resources have been described as the

multidomestic (Porter, 1986), or locally responsive (Prahalad and Doz, 1987)

approach to multinational management.

A high level of connectedness among the different external action

sets, on the other hand, will provide the MNC with greater discretion and

choice on its resource configuration. Such choice can be exercised on the

basis of different criteria. In some cases, even though the overall linkages

among the action sets may be high, some specific members in the different

action sets may only be weakly connected, or not connected at all. Such a

situation typically exists in the input action sets because of regulations

that selectively prohibit certain flows of people and products. Such

situations will tend to protect the "resource niches" (Aldrich, 1979) that may

have developed in some of the action sets because of traditional or non-

traditional comparative advantages of countries (Kogut; 1986). In this case,

the MNC might tend to concentrate specific activities in specific locations so

as to maximize its access to these resource niches on a global basis, and also

to benefit from such economies of scale as may be available for those

activities. In other words, its resource configuration may follow the

economic rationale proposed in location theories of foreign direct investment

(see review in Caves, 1982) and be concentrated and specialized in a few

locations instead of being dispersed among all the affiliated units.

When the connectedness among all the elements of the different action

sets is high, such resource niches may be eliminated because of freer flows.

If technologies developing in one location can be accessed instantaneously

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from others, or if excess capital available in one environment can be borrowed

in markets located in others, there is no longer any need to locate specific

activities in specific locations to benefit from access to local resources.

In this situation, the MNC can adopt a different set of criteria that emerge

from the attributes of the complex external networks that are formed through

the interconnections among the different local action sets.

Consider, for example, the situation when customers in locations A, B,

D, and E are strongly influenced by the tastes and preferences of customers in

C. Bartlett and Ghoshal (1986) and Prahalad and Doz (1987) have described the

existence of such "lead markets" in many businesses and their existence is

predicted by the "normative systems" that Laumann et al (1978) proposed as one

of the modalities that influence the behaviors of members in a network. In

such a situation, the MNC will tend to locate a significant amount of

resources in C so as to be able to sense the demands of local customers and

respond to them in a fashion that attracts their patronage. The level of

resources in C will match not the resources and opportunities that are

available in the local action set [AS] but the greater role of C as a nodalc

point in the broad external network that is created by the linkages among

[ASA ], [ASB ], [ASc ], etc.

In either of these two cases, however, the following hypothesis will

remain valid:

H2: Connectedness among action sets will be positively

associated with specialization and negatively associated

with dispersal in the configuration of resources in a

multinational.

A General Model And Three Special Cases.

We can now consider these two hypotheses collectively to propose a

general model of resource configuration in multinational companies, and also

suggest some specific cases that emerge under particular conditions.

To consider the general case, let us recognize that for most worldwide

businesses, the levels of connectedness within and across the action sets are

different in different national environments. Connectedness among the

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different action sets may be high in the developed countries of the west, or

among regional groupings, but low in developing countries or countries that

are relatively more regulated and autarcic. Similarly, connectedness within

the local action sets may be high in homogeneous societies with strong inter-

institutional linkages and low in countries where such linkages are

discouraged through legislation, or impeded because of societal heterogeneity

and the absence of linking institutions, or rendered ineffective because of

poor local communication infrastructures.

Therefore, the configuration of resources in multinationals engaged in

such businesses will be influenced by multiple criteria. In some locations

internal connectedness within the local action sets may be high, but external

connectedness with other action sets may be low. In such locations, the

multinational may provide all required resources in appropriate measures so

that its local units can be self-sufficient and can carry out all necessary

tasks independently on a local-for-local basis. The action sets in some other

countries may be weakly connected internally, but different elements of those

action sets may be strongly connected across the different countries. For

these locations, the multinational may create a resource structure that is

concentrated and specialized, and in some cases the location of the

specialized resources may reflect the desire to access special resource

niches, while in other cases the location choice may be motivated by the

modalities in the network that is created by the linkages among the action

sets. Finally, the action sets in a third group of locations may be

characterized by high connectedness both within and among themselves. In

these locations, the multinational may establish all the complementary

resources for integrated operations, but it may link these locations with

others so as to leverage those resources and achieve the economies of

concentration and specialization.

The overall resource configuration in the multinational's network of

affiliated organizations then, will reflect a mix of some resources that are

dispersed among some units on a purely local-for-local basis; some that are

concentrated in some countries to access specialized local resource pools, or

benefit from economies of scale, or in response to special roles that may be

played by actors in those locations in the external network of interconnected

action sets; and still others that are dispersed in certain locations, not for

meeting the local needs alone, but for serving other locations to which

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members of the local action sets might be connected. Thus, in this general

case, the multinational's resource configuration will reflect both dispersal

and specialization, and some parts of the dispersed and specialized resources

will be interlinked with multiplexed ties to support the intense internal

flows of products, people, and information that will be generated by such a

complex and interdependent system. This general case may be represented by a

model of multinationals as Differentiated Networks (DN): the word

differentiated highlighting the differences in the levels and kinds of

resources that are made available to the different units, and the word network

emphasizing the communication and exchange contents of the flows that must

internally link those differentiated, dispersed, and specialized resources.

From this general model, we can now derive three special cases that

would be obtained under specific conditions of connectedness within and among

the different local actions sets (see figure 1).

[Insert figure 1 about here]

If the connectedness within each of the local action sets is low, and

if the connectedness among all the different action sets is high, the

multinational can concentrate all its resources in any location of its choice.

Under such a condition, it might choose to locate almost all its resources in

one location, perhaps the home country because of the benefits of proximity

(Dunning, 1980), and may locate minimal resources in the other operating units

which may act merely as the local distributors of standardized products that

are designed and manufactured centrally. The resulting configuration of its

resources will match Perlmutter's (1969) model of the ethnocentric

multinational and Bartlett's (1986) description of the centralized hub.

Second, consider a situation where all the local action sets are

strongly connected internally but are not connected among themselves. In such

a situation, most of the resources of the MNC will be dispersed among the

operating units on a local-for-local basis, with little or no specialization,

so as to make each unit fully autonomous and self-sufficient. The resulting

configuration of resources will correspond to what Perlmutter described as the

polycentric multinational and Bartlett called the decentralized federation.

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Third, assume a situation when all the local action sets are highly

connected internally and also highly connected among themselves. In this

situation, the resources of the company will be dispersed among the various

operating units, and each unit will have a broad range of complementary

resources to facilitate integrative operations. However, each of these units

will have broader responsibilities for certain tasks for either the whole or

some part of the total network of all affiliated units. Such a configuration

corresponds to Perlmutter's description of the geocentric multinational,

Bartlett's proposal for the integrated network, and Hedlund's (1986)

conceptualization of a holographic organizational form that he labelled the

heterarchy.

The fourth situation of low connectedness both within and among the

action sets typically represents highly fragmented businesses that are not

international and often not even national in their structures. A

multinational is not expected to operate in such a context (Caves, 1982).

Centrality in the HNC Network

Centrality of a network has been defined differently by different

authors (Freeman, 1979, identifies three definitions) and has been typically

operationalized in terms of the communication content of the network (Aldrich

and Whetten, 1981). However, as suggested by Tichy et al (1979), it refers

essentially to the degree to which relations within the network are guided by

the formal hierarchy and is therefore determined by the distribution of power

within the network (Cook, 1977). The greater the asymmetries in internal

distribution of power, the greater the centrality in both the information and

the exchange contents of the network (Mitchell, 1973).

Recent literature on the distribution of power in a social network

reveals two main sources of power in such collectivities (Fombrun, 1983).

First, power is an antipode of dependency in exchange relations (Emerson,

1962) and accrue to those members of the network who control critical

resources required by others but do not depend on others for resources

(Aldrich, 1979; Pfeffer and Salancik, 1978). Following Cook (1977), this

might be called "exchange power" to distinguish it from the second source of

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power which may arise from structural rather than exchange dependencies.

"Structural power" can emanate from the position of a member within the

network: as described by Fombrun, "it can accrue to a member who occupies a

strategic position in a web of exchange relations" (1983:495).

Exchange-based distribution of power within a multinational would

depend on the dispersal of resources among its members. The greater the

dispersal of resources (controlling for specialization), the lesser is the

dependency of any affiliated organizational unit on others for resources, and

hence, the extent of asymmetry in internal exchange transactions. We can

therefore formulate the following hypothesis which derives support from the

well-established resource dependency perspective in organization theory

(Pfeffer and Salancik, 1978).

H3: Centrality of a multinational network will be negatively

associated with dispersal of resources within the network.

Similarly, structure or position based power within a multinational

will depend on the specialization of resources among its members. The greater

the specialization of resources (controlling for dispersal), the lesser is the

extent of one-way dependencies within the network and the greater the extent

of reciprocal dependencies (Thompson, 1967), and therefore, the frequency of

"balanced" relations that reduce the role of exchange based power (Emerson,

1962). However, a network of mutual dependencies also enhances the need for

coordination, and hence the power of "mediators" (Cook, 1977:72) who can

provide such coordination by virtue of their position in the network that

allows them to act as brokers in the flow of resources within the network.

The higher the specialization of resources in the network, the higher

the vulnerability of the network to the removal of the mediating actor (Cook,

1977), and hence higher the centrality of the mediating actor even though the

actor may not control any of the key resources directly. The following

hypothesis summarizes this argument:

H4: Centrality of a multinational network will be positively

associated with specialization of resources within the

network.

- 18 -

H3 and H4, in conjunction with HI and H2 lead to the following

hypothesis that relates the centrality of the multinational network directly

to the extents of connectedness within and among the different action sets of

its affiliated members:

H5: Centrality of a multinational network will be negatively

associated with connectedness within the action sets of

its affiliated members and positively associated with

connectedness among those action sets.

This derived hypothesis finds independent support from a different

strand of interorganizational theory, namely, the political economy pers-

pective developed by authors such as Benson (1975), and Provan et al (1980).

Benson, for example, had suggested that power in intraorganizational relations

may be influenced by the broader interorganizational linkages that are

established by the members. Subsequently, Provan et al provided empirical

support to this proposal when they demonstrated that power relations within

the network of United Way organizations were significantly modified by the

linkages between the individual agencies and other elements in their

communities upon which the United Way organization depended for its survival.

The dependence of the United Way on the local communities of its different

organizations is no different from the dependencies of the multinational on

the local action sets of its affiliated units: just as strong linkages within

the key elements of their communities enhanced the powers of the United Way

organizations, high levels of connectedness within the local action sets

enhance the powers of the individual members of the multinational network and

thereby reduce the centrality of the overall network. And, as a direct

corrolary of this argument, the higher the connectedness among the different

action sets, the lower the ability of individual members to accumulate power

by virtue of their links with their local action sets, and, therefore, the

potential centrality of the network.

Internal Coalitions and Multiple Centers

In the preceeding analysis of centrality, we have retained the

assumption that is pervasive in the existing literature on multinational

organizations, namely, that there is one center in the MNC - the headquarter -

- 19 -

and that the subsidiaries' activities and influences are limited to their

local jurisdictions. However, the very conceptualization of the MNC as an

interorganizational network that is embedded in an external network suggests

that this assumption might not be true. There is no reason for the external

network to have a single focal point. Further, even if it does have just one

node in the form of a single market that dominates all aspects of the business

on a world-wide basis, there is no guarantee that the node will coincide with

the location of the MNC's headquarters. Further, it is only for analytical

simplicity that we have considered only one external network for the MNC. In

reality, there will be multiple external networks, one each for the different

ways in which its activities can be defined. Consequently, the MNC network

can also have multiple centers, and different internal coalitions

corresponding to the different coalitions and nodes that may exist in its

multiple external networks (Burt, 1978).

Typically, these multiple external nodes have existed on a regional

basis, leading to the regional structure that has been adopted by many MNC's

(see the discussion on "regiocentric" MNCs in Heenan and Perlmutter, 1979).

Increasingly, however, the pattern is becoming more complex. To cite an

illustration, there is growing collaboration among the Post, Telegraph and

Telephone authorities (PTT) in different countries that are characterized by

thin population densities since their needs for public switching systems are

similar. Therefore, while Finland is located in Europe, its PTT has stronger

connections with the PTT in Australia than those in Germany or France. Such

collaboration among these key members of their external networks are forcing

multinationals supplying telecommunications switching equipment to redefine

the communication and exchange structures of their internal networks: for

example, Australia is emerging as a nodal point within Ericsson, the Swedish

telecommunications equipment company, specifically for its rural switching

business. Further, it is also leading to the formation of an internal

coalition (Pearce and David, 1983) within Ericsson involving Australia,

Finland, and Sweden with extensive flows of resources and information among

these units of the company to coordinate their rural switching operations (see

Bartlett and Ghoshal, forthcoming).

A detailed theoretical analysis of the formation of such multiple

nodes and coalitions within a multinational network is beyond the scope of

this paper and will be the topic of a forthcoming analysis. We mention the

- 20 -

issue, however, since the network approach predicts this phenomenon, the

existence of which has been documented by many authors (e.g., Poynter and

White, 1984; Bartlett and Ghoshal, 1986; Prahalad and Doz, 1987).

Conclusion

We have claimed that the main benefit of importing an interorganiza-

tional perspective into the analysis of multinational organizations is the

better match between complexity of the phenomenon and the ability of the

analytical concepts and tools to deal with such complexity. In this

concluding section, we return to this initial assertion and suggest how the

kind of analysis we have presented in this paper might provide the advantages

we have claimed. In particular, we highlight two potential strengths of the

network-theoretic approach. First, it provides an integrative framework for

simultaneous analysis at multiple levels such as the dyadic relationship

between any two organizational units of the multinational, overall attributes

of the multinational organization, and even higher order aggregates such as

the alliances that are increasingly being formed by different multinational

companies. Such simultaneous investigation across different levels of

analysis, we claim, is essential for the study of complex multi-unit

organizations such as the multinational. Second, such a conceptualization

also enables a single theoretical approach within which cross-sectional

analysis of organizational attributes of a multinational can also lead to an

understanding of the processes of its evolution, stability, and change.

Simultaneous Exploration at Different Levels of Analysis

Much of the existing literature on multinational organizations has

tended to focus exclusively on explaining differences among companies and,

therefore, to ignore differences within companies (see, for example, Daniels

et al, 1984; Egelhoff, 1982; Stopford and Wells, 1972). Such an approach may

be entirely appropriate for analysis of relatively small and simple

organizations in which case internal differences within them may be dwarfed by

the differences among them. In the case of complex multi-unit organizations

such as the multinational, however, an assumption of internal homogeneity may

be inappropriate and the analytical model may remain incomplete until

differences within and among organizations are incorporated within a broader

21 -

theoretical framework. The network approach provides such a framework within

which multiple levels of analysis can be addressed simultaneously, both for

theoretical formulations and for empirical studies.

Let us illustrate the issue with an example from the existing

literature. Centralization is perhaps the most studied attribute of

multinational organizations and much effort has been expended by scholars to

explain the level of centralization in MNCs as a function of a range of

organizational and environmental attributes such as foreign product diversity,

size of foreign operations, size of parent company, experience in

international operations, ownership of subsidiaries, technology complexity of

industry, age of subsidiary, intercompany transfers of products, dynamism in

competitive climate, and so on. Table 1 shows the authors who found positive,

negative, and no associations between centralization and each of these

different variables. The differences in the findings have typically been

ascribed to differences in samples and measurement procedures but, as is

manifest from the table, each new study has only provided an additional set of

data points without resolving the ambiguity in any way.

[Insert Table 1 about here]

The network concept, on the other hand, suggests that the problem with

these studies may well lie not in the samples or measurements, but in their

focus on differences among MNC's in isolation of the differences within them.

By ignoring the potentially significant differences in centralization for

different organizational units of the multinational, these studies may well

have been victims of what Fisher (1970:172) called the "reductive fallacy (;)

the fallacy of reducing complexity to simplicity, or diversity to uniformity."

The network formulation would provide the tools for simultaneous

analysis of each dyadic linkage within the multinational, and the overall

attributes of the network that are not mere aggregates of the dyadic

relationships but are independently influenced by the structure of the

network. The individual linkages, for example, can be operationalized as

mixed-motive dyads and the governance structure for each linkage can be

analyzed on the basis of mutual resource dependencies (Schmidt and Kochan,

1977). A recent empirical study by Ghoshal and Nohria (1987) illustrates such

- 22 -

an approach and shows how internal differences in structural attributes such

as centralization, formalization, and socialization can be related to the

resource structures of MNC's. At the same time, information of the different

dyadic links can be analyzed through partitioning and blockmodelling

techniques for studying different network level attributes and for explaining

aggregate level differences among MNC's (for review and references, see Nohria

and Venketraman, 1987).

Further, the traditional approaches of organizational analysis

requires a clear definition of the organization's boundary. As suggested by

Powell (1987), the proliferation of "hybrid organizations" is making such a

distinction between the organization and its environment increasingly

difficult and arbitrary. Nowhere is the problem more accute than in the

analysis of MNCs who are increasingly forming alliances of different kinds

with their suppliers, customers, and competitors (see Horwitch, forthcoming).

As a recent collection of work on such alliances (Contractor and Lorange,

1987) demonstrates clearly, it is proving to be difficult to incorporate this

phenomenon within traditional analytical frameworks. By focusing on relations

among actors, the network analytic approach provides greater flexibility with

regard to the definition of boundaries, and can therefore be applied for

analyzing the complex structures that are formed by such alliances. Recent

methodological developments of network partitioning have now created the

opportunity for incorporating a level of rigour in the analysis of such

relationships - for example, the definition of the "roles" of different

partners as revealed through blockmodelling algorithms - that has been lacking

in most existing studies (see Walker, 1987 for suggestions on how network

methodologies can be applied to the analysis of inter-firm cooperative

relationships).

Linking cross-sectional analysis with evolution and change

Observers of evolution and change in multinational organizations have

repeatedly lamented that the traditional tools of structural analysis provide

little help in explaining the dynamics of such organizations (see, for

example, Bartlett, 1982 and Leksell, 1981). As suggested by Bartlett,

evolution and change in multinationals are driven by changing patterns of

relationships among organizational units that participate in different

- 23 -

decision processes. Traditional cross-sectional analysis, on the other hand,

has typically focused on structural artifacts such as the choice between area,

product, and matrix structures (Stopford and Wells, 1972) which provide little

information on the nature of internal relationships and actual management

processes. Consequently, the literature has developed along two parallel

paths of increasingly sophisticated cross-sectional and dynamic analysis but

without developing a bridge between the two.

Network analysis, by its very focus on relationships and flows, can

provide such a bridge. For example, based on the concepts presented in this

paper, we can formulate the change process as arising from the sequential

influences of the external network of the internal resource configuration, and

of resource configuration on governance and coordination mechanisms. Changing

levels of connectedness within and across the external action sets can be pro-

posed as the exogenous elements that would determine the nature and direction

of change. The strength of internal ties (Granovetter, 1973) and the

perceived fairness of internal exchange relationships (Zeitz, 1980) - both

attributes being influenced directly by the nature of the external network but

also by what Bartlett (1986) describes as the administrative heritage of the

company - can be seen as the mediating factors that determine the rate and

pace of change. Through such a formulation, different constructs of which are

relatively well developed in the literature, an overall theory can be deve-

loped for linking cross-sectional analysis with the study of evolution,

stability, and change in MNC's.

As a concluding point, it needs to be noted that our proposal to

conceptualize multinational organizations as interorganizational networks is

not an altogether new research approach but an effort to build on some con-

cepts that exist in the international management literature but that, to our

view, have not been sufficiently developed because of inadequate research

attention. We have referred earlier to the seminal work of Perlmutter (1969),

and his scheme of categorizing multinationals as ethnocentric, polycentric,

and geocentric organizations is clearly a network theoretic view. His work

and the subsequent refinements and elaborations of his models (e.g.,

Rutenberg, 1970) both motivate and influence our analysis. Similarly, the

stylized models of MNC organizations developed by Bartlett (1986) and Hedlund

(1986) are grounded in the same concepts and constructs of network theory that

- 24 -

we have utilized in our formulation of the differentiated network model pre-

sented in this paper. Further, if the interorganizational approach is impli-

cit in the work of these authors, it is explicit in Herbert's (1984) analysis

which shows the relevance of the resource dependency model in explaining

strategy-structure configurations in MNC's. It is unfortunate that these

proposals have not been pursued more vigourously by empirical researchers,

perhaps because the conceptual models were not adequately related to the

relevant strands of theory. Our objective in this paper was to take a step,

albeit small, in the direction of building a bridge between these rich and

inductively derived models of multinational organizations and some recent

perspectives from interorganizational theory and network analysis.

Multinational organizations

not expected to exist in

this context

The ethnocentric

multinational

(Perlmutter)

The centralized hub

(Bartlett)

The Polycentric multina-

tional (Perlmutter)

The geocentric multi-

national (Perlumtter)

The decentralized federation The integrated network

(Bartlett) (Bartlett)

The heterarchy

(Hedlund)

- 25 -

Connectedness among the different local action sets

LOW HIGH

LOW

Figure 1

Multinational organizational forms under different

conditions of external action sets

Connectedness

within each

local action

set

HIGH

Stopford and Wells (1972),Alsegg (1971), Hedlund(1980), Picard (1977),Gates and Egelhoff (1984)

Brooke and Remmers (1978),Gates and Egelhoff (1984)

Picard (1977)

Gates and Egelhoff (1984)

Hedlund (1980)

Association with CentralizationsContingencyvariables

PositiveCorrelation

No correlation/Mixed Results

NegativeCorrelation

1. Foreign productdiversity

2. Size of foreignoperations

3. Size of parent

4. Experience ininternationaloperations

5. Ownership ofsubsidiaries

6. Technologycomplexity ofindustry

Garnier (1982)

Picard (1977)

Garnier (1982),Youssef (1975),Picard (1977),Gates andEgelhoff (1984)

Hedlund (1980)

Garnier (1982)

Hulbert andBrandt (1980)

Picard (1977),Garnier (1982)

Aylmer (1970),Weichmann (1974),Hulbert andBrandt (1980),Hedlund (1980)

Hedlund (1980)

Picard (1977)

7. Age of subsi- Alsegg (1971),diary Youssef (1975),

Gates andEgelhoff (1984)

8. Intercompany Garnier (1982),transfers of Picard (1977).products Hedlund (1980)

9. Dynamism in Gates andcompetitive Egelhoff (1984)climate

Garnier (1982),Goehle (1980).Roccour (1966)

- 26 -

Table 1

Research on Centralization in HNC's: Summary of Findings

- 27 -

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NOTE

Sumantra Ghoshal (Ph.D, MIT and DBA, Harvard) is AssistantProfessor of Management at the European Institute of BusinessAdministration (INSEAD), Fontainebleau, France. Christopher A.Bartlett (DBA, Harvard) is Associate Professor at the HarvardBusiness School. The authors thank Nitin Nohria who was anactive and equal partner during the idea development phase, and

would have been a co-author of this paper but for the temporary

distraction of having to write a doctoral dissertation.

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85/05 Ahmet AYKAC,Marcel CORSTJENS,David GAUTSCHIand Ira HOROWITZ

85/06 Kasra FERDOWS

85/07 Kasra FERDOWS,Jeffrey G. MILLER,Jinchiro NAKANE andThomas E.VOLLMANN.

85/08 Spyros MAKRIDAKISand Robert CARBONE

85/09 Spyros MAKRIDAKISand Robert CARBONE

85/10 Jean DERMINE

85/11 Antonio M. BORGES andAlfredo M. PEREIRA

85/12 Arnoud DE MEYER

85/13 Arnoud DE MEYER

85/14 Ahmet AMC,Marcel CORSTJENS,David GAUTSCHI andDouglas L. MacLACHLAN

85/15 Arnoud DE MEYER andRoland VAN DIERDONCK

85/16 Hervig M. LANGOHR andAntony M. SANTOMERO

"The measurement of interest rate risk byfinancial intermediaries", December 1983,Revised December 1984.

"Diffusion model for nev product introductionin existing markets" .

"Towards a decision support system forhierarchically allocating marketing resourcesacross and within product groups" ."Market share specification, estimation andvalidation: towards reconciling seeminglydivergent views" .

"Estimation uncertainty and optimaladvertising decisions",Second draft, April 1985.

"The shifting paradigms of manufacturing:inventory, quality and nov versatility", March1985.

"Evolving manufacturing strategies in Europe,Japan and North-America"

"Forecasting when pattern changes occurbeyond the historical data" , April 1985.

"Sampling distribution of post-sampleforecasting errors" , February 1985'.

"Portfolio optimization by financialintermediaries in an asset pricing model".

"Energy demand in Portuguese manufacturing: atwo-stage model".

"Defining a manufacturing strategy - a surveyof European manufacturers".

"large European manufacturers and themanagement of R I 0".

"The advertising-sales relationship in theU.S. cigarette industry: a comparison ofcorrelational and causality testingapproaches".

"Organizing a technology jump or overcomingthe technological hurdle".

"Commercial bank refinancing and economicstability: an analysis of European features".

"The darker side of entrepreneurship".

"Narcissism and leadership: an objectrelations perspective".

"Interpreting organizational texts".

"Nationalization, compensation and wealthtransfers: Prance 1981-1982° 1, Final versionJuly 1985.

"Takeover premiums, disclosure regulations,and the market for corporate control. Acomparative analysis of public tender offers,controlling-block trades and minority buyout inPrance", July 1985.

"Barriers to adaptation: personal, culturaland organizational perspectives".

"The art and science of forecasting: anassessment and future directions".

"Financial innovation and recent developmentsin the French capital markets", October 1985.

"Patterns of competition, strategic groupformation and the performance case of the USpharmaceutical industry, 1963-1982",October 1985.

"European manufacturing: a comparative study(1985)".

"The R I 0/Production interface".

"Subjective estimation in integratingcommunication budget and allocationdecisions: a case study", January 1986.

"Sponsorship and the diffusion oforganizational innovation: a preliminary view".

"Confidence intervals: an empiricalinvestigation for the series in the K-Competition" .

"A note on the reduction of the workweek",July 1985.

85/18 Manfred F.R. KETSDE VRIES

85/19 Manfred F.R. KETS DEVRIES and Dany MILLER

85/20 Manfred F.R. VETS DE

VRIES and Dany MILLER

85/21 Hervig M. LANGOHRand Claude J. VIALLET

85/22 Hervig M. LANGOHR andB. Espen ECKBO

85/23 Manfred F.R. KETS DEVRIES and Dany MILLER

85/24 Spyros MAKRIDAKIS

85/25 Gabriel HAWAWINI

85/26 Karel O. COOL andDan E. SCHENDEL

85/27 Arnoud DE MEYER

1986

86/01 Arnoud DE MEYER

86/02 Philippe A. NAERTMarcel WEVERBERGHand Guido VERSVIJVEL

86/03 Michael BRIMM

86/04 Spyros MAKRIDAKISand Michele HIBON

86/05 Charles A. WYPLOSZ

86/06 Francesco GIAVAllI,Jeff R. SHEEN andCharles A. WYPLOSZ

"The real exchange rate and the fiscalaspects of a natural resource discovery",Revised version: February 1986.

86/22 Albert CORHAY, "Seasonality in the risk-return relationshipsGabriel A. HAWAWINI some international evidence", July 1986.and Pierre A. MICHEL

86/07 Douglas L. MacLACHLANand Spyros MAKRIDAKIS

86/08 Jose de la TORRE andDavid H. NECKAR

86/09 Philippe C. HASPESLAGH

86/10 R. MOENART,Arnoud DE MEYER,J. BARGE andD. DESCHOOLMEESTER.

86/11 Philippe A. NAERTand Alain BULTEZ

86/12 Roger BETANCOURTand David GAUTSCHI

86/13 S.P. ANDERSONand Damien J. NEVEN

86/14 Charles WALDMAN

B6/15 Mihkel TOMBAK andArnoud DE MEYER

"Judgmental biases in sales forecasting",

February 1986.

"Forecasting political risks forinternational operations", Second Draft:March 3, 1986.

"Conceptualizing the strategic process indiversified firms: the role and nature of thecorporate influence process", February 1986.

"Analysing the issues concerningtechnological de-maturity".

"Prom "Lydiametry" to "Pinkhamization":■isspecifying advertising dynamics rarelyaffects profitability".

"The economics of retail firms", RevisedApril 1986.

"Spatial competition A la Cournot".

"Comparaison internationale des merges brutesdu commerce", June 1985.

"goo the managerial attitudes of firms withFMS differ from other manufacturing firms:survey results", June 1986.

"An exploratory study on the integration ofinformation systems in manufacturing",July 1986.

"A methodology for specification andaggregation in product concept testing",July 1986.

"Protection", August 1986.

"The economic consequences of the FrancPoincare", September 1986.

"Negative risk-return relationships inbusiness strategy: paradox or truism?",October 1986.

"Interpreting organizational texts.

"Why follov the leader?".

"The succession game: the real story.

"Flexibility: the next competitive battle",

October 1986.

"Flexibility: the next competitive battle",Revised Version: March 1987

86/23 Arnoud DE MEYER

86/24 David GAUTSCHIand Vithala R. RAO

86/25 H. Peter GRAYand Ingo WALTER

86/26 Barry EICHENGREENand Charles WYPLOSZ

86/27 Karel COOLand Ingemar DIERICKK

86/28 Manfred KETS DEVRIES and Danny MILLER

86/29 Manfred KETS DE VRIES

86/30 Manfred KETS DE VRIES

86/31 Arnoud DE MEYER

86/31 Arnoud DE MEYER,Jinichiro NAKANE,Jeffrey G. MILLERand Kasra FERDOWS

86/16 B. Espen ECKBO andHervig M. LANGOHR

86/17 David B. JEMISON

86/18 James TEBOULand V. MALLERET

86/19 Rob R. WEITZ

86/20 Albert CORHAY,Gabriel HAWAWINIand Pierre A. MICHEL

86/21 Albert CORHAY,Gabriel A. HAWAWINIand Pierre A. MICHEL

"Les primes des offres publiques, la noted'inforaation et le marche des transferts decontrAle des sociAtes".

"Strategic capability transfer in acquisitionintegration", May 1986.

"Towards an operational definition ofservices", 1986.

"Nostradamus: a knowledge-based forecastingadvisor".

"The pricing of equity on the London stockexchange: seasonality and size premium",June 1986.

"Risk-premia seasonality in U.S. and Europeanequity markets", February 1986.

86/32 Karel COOLand Dan SCHENDEL

86/33 Ernst BALTENSPERGERand Jean DERMINE

86/34 Philippe HASPESLAGHand David JEMISON

86/35 Jean DERMINE

86/36 Albert CORHAY andGabriel HAWAVINI

86/37 David GAUTSCHI andRoger BETANCOURT

86/38 Gabriel HAWAWINI

Performance differences among strategic groupmembers", October 1986.

"The role of public policy in insuringfinancial stability: a cross-country,comparative perspective", August 1986, RevisedNovember 1986.

"Acquisitions: myths and reality",July 1986.

"Measuring the market value of a bank, aprimer", November 1986.

"Seasonality in the risk-return relationship:

some international evidence", July 1986.

"The evolution of retailing: a suggestedeconomic interpretation".

"Financial innovation and recent developmentsin the French capital markets", Updated:September 1986.

86/39 Gabriel HAWAWINIPierre MICHELand Albert CORHAY

86/40 Charles WYPLOSZ

86/41 Kasra FERDOWSand Wickham SKINNER

86/42 Kasra FERDOWSand Per LINDBERG

86/43 Damien NEVEN

86/44 Ingemar DIERICKXCarmen MATUTESand Damien NEVEN

1987

87/01 Manfred KETS DE VRIES

87/02 Claude VIALLET

87/03 David GAUTSCHIand Vithala RAO

87/04 Sumantra CHOSHAL andChristopher BARTLETT

87/05 Arnoud DE MEYERand Kasra FERDOWS

87/06 Arun K. JAIN,Christian PINSON andNaresh K. MALHOTRA

87/07 Rolf BANZ andGabriel HAWAVINI

87/08 Manfred KETS DE VRIES

87/09 Lister VICKERY,Mark PILKINGTONand Paul READ

87/10 Andre LAURENT

87/11 Robert PILDES andSpyros MAKRIDAKIS

"The pricing of common stocks on the Brusselsstock exchange: a re-examination of theevidence", November 1986.

"Capital flows liberalization and the EMS, aFrench perspective", December 1986.

"Manufacturing in a new perspective",July 1986.

"FMS as indicator of manufacturing strategy",December 1986.

"On the existence of equilibrium in hotelling'smodel", November 1986.

"Value added tax and competition",December 1986.

"Prisoners of leadership".

"An empirical investigation of internationalasset pricing", November 1986.

"A methodology for specification andaggregation in product concept testing",Revised Version: January 1987.

"Organizing for innovations: case of themultinational corporation", February 1987.

"Managerial focal points In manufacturingstrategy", February 1987.

"Customer loyalty as a construct in themarketing of banking services", July 1986.

"Equity pricing and stock market anomalies",February 1987.

"Leaders who can't manage", February 1987.

"Entrepreneurial activities of European MBAs",March 1987.

"A cultural view of organizational change",March 1987

"Forecasting and loss functions", March 1987.

87/13 Sumantra GHOSHALand Nitin NOHRIA

87/14 Landis GABEL

87/15 Spyros MAKRIDAKIS

87/16 Susan SCHNEIDERand Roger DUNBAR

87/17 Andre LAURENT andFernando BARTOLOME

87/18 Reinhard ANGELMAR andChristoph LIEBSCHER

87/19 David BEGC andCharles WYPLOSZ

87/20 Spyros MAKRIDAKIS

87/21 Susan SCHNEIDER

87/22 Susan SCHNEIDER

87/23 Roger BETANCOURTDavid GAUTSCHI

87/24 C.B. DERR andAndre LAURENT

87/25 A. K. JAIN,N. K. MALHOTRA andChristian PINSON

87/26 Roger BETANCOURTand David GAUTSCHI

87/27 Michael BURDA

87/28 Gabriel HAVAVINI

87/29 Susan SCHNEIDER andPaul SHRIVASTAVA

"Multinational corporations as differentiatednetworks", April 1987.

"Product Standards and Competitive Strategy: AnAnalysis of the Principles", May 1987.

"METAFORECASTING: Ways of improvingForecasting. Accuracy and Usefulness",May 1987.

"Takeover attempts: vhat does the language tellus?, June 1987.

"Managers' cognitive maps for upward anddownward relationships", June 1987.

"Patents and the European biotechnology lag: astudy of large European pharmaceutical firms",June 1987.

"Why the EMS? Dynamic games and the equilibriumpolicy regime, May 1987.

"A new approach to statistical forecasting",June 1987.

"Strategy formulation: the impact of nationalculture", Revised: July 1987.

"Conflicting ideologies: structural andmotivational consequences", August 1987.

'The demand for retail products and thehousehold production model: new views oncomplementarity and substitutability".

"The internal and external careers: atheoretical and cross-cultural perspective",Spring 1987.

"The robustness of MDS configurations in theface of incomplete data", March 1987, Revised:July 1987.

"Demand complementarities, household productionand retail assortments", July 1987.

"Is there a capital shortage in Europe?",August 1987.

"Controlling the interest-rate risk of bonds:an introduction to duration analysis andimmunization strategies", September 1987.

"Interpreting strategic behavior: basicassumptions themes in organizations", September1987

87/12 Fernando BARTOLOMEand Andre LAURENT

"The Janus Bead: learning from the superiorand subordinate faces of the manager's Job",April 1987.

87/30 Jonathan HAMILTON "Spatial competition and the Core", AugustW. Bentley MACLEOD and 1987.Jacques-Francois THISSE

07/31 Martine OUINZII and "On the optimality of central plac•:,",Jacques-Francois THISSE September 1987.

87/32 Arnoud DE MEYER

"German, French and British manufacturingstrategies less different than one thinks",September 1987.

87/33 Yves DOZ and "A process framevork for analyzing cooperationAmy SHUEN betveen firms", September 1987.

07/34 Kasra FERDOVS and

"European manufacturers: the dangers ofArnoud DE MEYER

complacency. Insights from the 1987 Europeanmanufacturing futures survey, October 1987.

07/35 P. J. LEDERER and "Competitive location on networks under

J. F. TIIISSE discriminatory pricing", September 1907.

87/36 Manfred KETS DE VRIES "Prisoners of leadership", Revised versionOctober 1987.

87/37 Landis GABEL "Privatization: its motives and likelyconsequences", October 1987.

87/38 Susan SCHNEIDER

"Strategy formulation: the impact of national

culture", October 1987.

87/39 Manfred KETS DE VRIES "The dark side of CEO succession", November

1987

81/40 Carmen MATUTES and

"Product compatibility and the scope of entry",

Pierre REGIBEAU

November 1987

87/41 Cavrlel flAWAVINI and "Seasonality, size premium and the relationship

Claude VIALLET betveen the risk and the return of Frenchcommon stocks", November 1987

87/42 Damien NEVEN and

"Combining horizontal and vertical

Jacques-F. TIIISSE

differentiation: the principle of max-mindifferentiation", December 1987

87/43 Jean GABSZEW1CZ and

"Location", December 1987Jacques.F. THISSE

87/44 Jonathan HAMILTON,

"Spatial discrimination: Bertrand vs. CournotJacques-F. THISSE

in a model of location choice", December 1987

and Anita WESKAMP

87/45 Karel COOL, "Business strategy, market structure and risk-

David JEHISON and

return relationships: a causal interpretation",

Ingemar DIERICKX

December 1987.

87/46 Ingemar DIERICKX

"Asset stock accumulation and sustainability

and Karel COOL of competitive advantage", December 1907.

"Factors affecting judgemental forecasts andconfidence intervals", January 1988.

"Predicting recessions and other turningpoints", January 1988.

"De-industrialize service for quality", January1988.

"National vs. corporate culture: implicationsfor human resource management", January 1988.

"The swinging dollar: is Europe out of step?",January 1988.

"Les conflits dans les canaux de distribution",January 1988.

"Competitive advantage: a resource basedperspective", January 1988.

"Issues in the study of organizationalcognition", February 1988.

"Price formation and product design throughbidding", February 1988.

"The robustness of some standard auction gameforms", February 1988.

"When stationary strategies are equilibriumbidding strategy: The single-crossingproperty", February 1988.

"Business firms and managers in the 21stcentury", February 1988

"Alexithymia in organizational life: theorganization man revisited", February 1988.

"The interpretation of strategies: a study ofthe impact of CEOs on the corporation",March 1988.

"The production of and returns from industrialinnovation: an econometric analysis for adeveloping country", December 1987.

"Market efficiency and equity pricing:international evidence and implications forglobal investing", March 1988.

"Monopolistic competition, costs of adjustmentand the behavior of European employment",

88/01 Michael LAWRENCE andSpyros MAKRIDAKIS

88/02 Spyros MAKRIDAKIS

88/03 James TEBOUL

88/04 Susan SCHNEIDER

88/05 Charles WYPLOSZ

88/06 Reinhard ANGELMAR

88/07 Ingemar DIERICKXand Karel COOL

88/08 Reinhard ANGELMARand Susan SCHNEIDER

88/09 Bernard SINCLAIR-DESGAGNe

88/10 Bernard SINCLAIR-DESGAGNe

88/11 Bernard SINCLAIR-DESGAGNe

88/12 Spyros MAKRIDAKIS

88/13 Manfred KETS DE VRIES

88/14 Alain NOEL

88/15 Anil DEOLALIKAR andLars-Hendrik ROLLER

88/16 Gabriel HAWAWINI

88/17 Michael BURDA

88/18 Michael BURDA "Reflections on "Wait Unemployment" inEurope", November 1987, revised February 1988.

88/24 B. Espen ECKBO andHerwig LANGOHR

"Individual bias in judgements of confidence",March 1988.

"Portfolio selection by mutual funds, anequilibrium model", March 1988.

"De-industrialize service for quality",March 1988 (88/03 Revised).

"Proper Quadratic Functions with an Applicationto AT&T", May 1987 (Revised March 1988).

"Equilibres de Nash-Cournot dans le march6europeen du gaz: un cas oil 1es solutions enboucle ouverte et en feedback coincident",Mars 1988

"Information disclosure, means of payment, andtakeover premia. Public and Private tenderoffers in France", July 1985, Sixth revision,April 1988.

88/19 M.J. LAWRENCE andSpyros MAKRIDAKIS

88/20 Jean DERMINE,Damien NEVEN andJ.F. THISSE

88/21 James TEBOUL

88/22 Lars-Hendrik ROLLER

88/23 Sjur Didrik FLAMand Georges ZACCOUR

88/25 Everette S. GARDNERand Spyros MAKRIDAKI

"The future of forecasting", April 1988.S

88/26 Sjur Didrik FLAM

"Semi-competitive Cournot equilibrium inand Georges ZACCOUR

multistage oligopolies", April 1988.

88/27 Murugappa KRISHNAN

"Entry game with resalable capacity",Lars-Hendrik ROLLER

April 1988.