Why are Coordination and Control increasingly important for companies doing business globally?

• Overseas units are more important financially
• Overseas units often act independently
• Host country govts. often demand greater autonomy for subsidiaries
• Strict control is less viable in joint ventures
• Tech. advantages of the head office are eroding
• Mgt/technical know-how is more widespread
• Expatriates are a less viable control strategy

In order for the transnational to work, the organization needs: 

• Identification with firm-wide rather than local objectives
• Identification with, involvement with, loyalty to, and attachment to the world-wide org.
• Creation of verbal info networks
• Positive attitudes toward other nationalities

Two Key types of Control:

Which control is impersonal and centralized?

Bureaucratic controls

-Information systems

-Resource allocation procedures

-Budgeting, monitoring of objective data

-Reports, rules, routines, standard operating procedures

-Reward systems

-Hierarchy

Two Key Types of Controls:

Which one is personal and decentralized?

Organic Controls

-Shared values, corporate culture

-Task forces, coordination committees, integrators

-Short-term transfers, frequent transfers (build less attachment to other social systems)

-Significant, repeated travel

-Socialization

-Due process (procedural justice)

According to Korbin, what are some advantages of using local nationals instead of expatriates? There are 4.

1. Lowering costs
2. Increasing material effectiveness
3. Minimizing conflict with both employees and enviromental groups
4. Contributing to host country managerial and technical development

What are some of Korbin's concerns on the reduction in the use of expatriates? There are 4.

1. Knowledge of, and, indetification with the global organization
2. Indentification w/firm-wide rather than local objectives
3. Corporate control of local subsidiaries
4. Acquistion of intl. experience by HCN

What are the key elements of Due Process?

• Head office is familiar with subsidiaries' local situations
• Two-way communication exists in the global strategy-making process
• The head office is relatively consistent in making decisions across subsidiaries
• Subsidiaries can legitimately challenge HQ's strategic views and decisions
• Subsidiaries receive an explanation for final strategic decisions

Importance of Due Process

• Relies on commitment, trust, social harmony, and motivation

*Commitment-Inspires managers to identify with MCN global objectives, exert effort, accept responsiblity, and exercise initiative

*Trust-Inspires managers to more readily accept in good faith the intentions, actions, and decisions of HQ

*Social harmony-encourages efficient and effecive exchange relations

*Motivation-voluntary execution

Why are traditional implementation mechanisms failing?

• Not motiviation
• Easy to Dodge and cheat
• *apprasial and control quality more difficult to determine
• *power of the head office lessening
• *common values and expectations becoming more diversified (ie subsidiaries have own distinct values

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