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Revisiting Ghoshal and Bartlett’s Theory of the Multinational Corporation as an Interorganizational Network

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Abstract

More than 25 years after its appearance, Ghoshal and Bartlett’s seminal paper ‘The Multinational Corporation as an Interorganizational Network’ stands as a widely recognized but insufficiently understood contribution to the international management literature. This paper reviews related literature, celebrates and critically discusses Ghoshal and Bartlett’s work and proposes ways to address its main limitations, which are a lack of a defined set of parameters describing networks and the delineation of network boundaries. We then translate their theory into concrete propositions and thereby bring it closer to empirical testing. Taking a subsidiary-network perspective, we expand the authors’ work by combining network and entrepreneurship literature and theoretically deducting positive effects of networks on subsidiary entrepreneurial orientation. This yields entirely new insights and a more holistic view of the effects of subsidiary networks.

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Notes

  1. Soon after the appearance of Ghoshal and Bartlett’s paper, the Academy of Management Review published a paper by Gupta and Govindarajan (1991) that was somehow similar than Ghoshal and Bartlett’s paper, but without any reference to this, ‘devoted to advancing the theoretical base for the conduct of future research on the subject of strategy-organization coalignment within MNCs’ (p. 768). Their paper provides many insights that are also helpful for the present article, but focuses more on describing the characteristics of different subsidiary role models than on the impact of internal and external networks characteristics on structural and cultural variables.

  2. Andersson and Pahlberg (1997, p. 329) claim that ‘a fundamental characteristic of a network is that it is unbounded and therefore some kind of arbitrary boundary must be drawn. The unbounded and transparent nature of networks makes it useful to identify the actors' view of the relevant network.’

  3. This should not be confused with Ghoshal and Bartlett’s (1990, p. 610) external network, which encompasses ‘all members of all the organization sets of the different units’ of the MNC, regardless of whether they reside inside or outside it.

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Djodat, N., zu Knyphausen-Aufseß, D. Revisiting Ghoshal and Bartlett’s Theory of the Multinational Corporation as an Interorganizational Network. Manag Int Rev 57, 349–378 (2017). https://doi.org/10.1007/s11575-016-0298-3

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