Abstract

To date, research in the management of multi-national corporations (MNCs) has followed two trends. One area considers the structural makeup of the organization, while the other focuses upon the control and supervisory relations within the formal framework. The article draws ideas from both lines of investigation in order to discover the factors affecting the nature of corporate-local relationship in MNCs. A critical challenge in the successful management of a multinational corporation (MNC) is the discovery of suitable structural and operational arrangements to tie the home base with overseas subsidiaries, affiliates, or joint ventures. Because MNCs operate in a complexity of environments rather than a single national setting, this problem transcends traditional management science in both theory and practice. Recent research in the maintenance of organizational relationships between home and overseas operations indicates that MNCs are attempting to provide each overseas unit with a certain amount of flexibility in using its human, economic, and technical resources. To measure this, the MNCs gradually decentralize their overall corporate structure.