Introduction

Abstract

Many contributions in the international business (IB) literature view multinational corporations (MNCs) as intra-organizational networks. MNCs are no longer regarded as hierarchically structured with headquarters as the single centre of resources, power and decision making authority (Lipparini & Fratocchi 1999, p. 656). Terms such as “heterarchy” (Hedlund 1986, p. 9), multifocal “diversified multinational corporation (DMNC)” (Prahalad & Doz 1987, p. 1) and “transnational company” (Bartlett & Ghoshal 1991) were coined in order to describe multinational network corporations (network MNCs) which are often portrayed as resembling a “coalition of interests” (Forsgren 1989, p. 6) rather than a hierarchy. Subsidiaries can play various roles within network MNCs, carry out different activities and focus on diverse steps of the value chain (Bartlett & Ghoshal 1986, 1991; Ghoshal & Nohria 1989). The notion of differentiated subsidiary roles has inspired a considerable amount of conceptual work as well as empirical research (for an overview, see Schmid 2004; Schmid, Bäurle & Kutschker 1998).