Three Organizational Challenges for Multinational Enterprises

The rapidly changing and volatile institutional environments, within which Multinational Enterprises (MNEs) must operate, have put traditional organisational forms under pressure. Globalization and regionalism develop at the same time, whereas regulation facilitating Foreign Direct Investment (FDI) runs parallel to ‘reverse measures’ frustrating FDI (PIBR #7 – Van Tulder et al. 2012 provides an overview of mixed institutional pressures on the MNE). The leading question that this volume addresses is therefore whether there are adequate organizational responses that the MNEs can develop to these mixed pressures. How to internalize external inefficiencies, inter alia in the broader stakeholder sphere? MNEs have been responding along a variety of paths. One path has been to redraft relationships between headquarters and existing subsidiaries. Another path has been to adopt new organisational forms, both internally (team-based approaches and asymmetrical networks) and externally, (advanced management of value chains and stakeholder ecosystems). As a result, new organizational arrangements have appeared, including micro-multinationals, ‘born globals’, springboard multinationals, as well as other types of international new ventures. Taking stock of the present discourse in International Business (IB) we divide this chapter, and the contributions in this volume, along three organizational challenges. 1) Changing hierarchies: considers the shifting roles of headquarters and subsidiaries in MNEs, and explores the question whether headquarters still matter from various angles. 2) New organizational forms: considers new forms of organizing internationalization and international activities, including new roles of teams in multinational organizations. This part explores the question whether size still matters for MNEs. 3) Reorganizing the value chain: which gathers novel ideas about how multinational firms use external partners and parties in the organization of their international activities. The leading question here is whether the position of the MNE in the (international) value chain still matters. This chapter elaborates these three themes and provides a short account of each of the contributions that are selected for this volume in parts II, III and IV. These contributions include research-oriented papers, panel discussions and case studies