The paper “ The Multinational Corporation as an Interorganizational Network, Multinational Corporations and Local Firms in Emerging Economies” is a spectacular example of a literature review on management. Management of an organization can be broken down into two parts that can be identified as a simple management practice and sophisticated management practice. Simple management practice can apply to small-scale organizations that may have one or a few branches. On the other hand, complex management practice is evident in a large-scale organization that has established branches all over a region or other parts of the world.
Such organizations are referred to as multinational corporations. Most multinational organizations have headquarters and several branches distributed in other nations. Multinational organizations often develop a unique network that links up the substituent of the primary organization. Typically, the headquarters are responsible for setting the general standards that the other branches emulate. The headquarters produce a template that the other branches use, and the trend is the same to include vision and mission. Management for such organizations is often complex, and strategic decisions often take a longer time to be attained.
The general way in which management is effected in such organizations has created a network-like business environment. Distribution of power, structure, and organizations are identical and linked to the headquarters. The nature of multicultural organizations has created a notion that they can be termed as an inter-organizational network. Summary of articleThe article by Ghoshal and Bartlett attempts to establish if multinational corporations can also be referred to as an inter-organizational network. The authors have used an example of an organization with its headquarters in Holland and many branches around the globe.
N. V Philips has several organizational units that also exhibit several inter-linkages. The chart has been used to indicate how these inter-linkages form a network that connects all the organizations under N. V Philips despite the country in which the organizational units are located. The article highlights the number of theories that relate to the existence of inter-organization and a multi-national corporation. Most organizations that have been highlighted by the authors are not under the same ownership. It has been established that there is a link between ownership and the existing power vested in the hierarchy.
Different contexts have been provided that relate to inter-organizational interactions. The authors further provided the relevant constructs and terminologies applicable to multinational as a network. The terminologies include external network, within density and across density. The configuration of resources in the multinational networks has been discussed. The authors suggest that identical resources can be traced to different organizational units. The term dispersal has been used to describe the nature in which resources of organization units are differently allocated. It has been established that the national organizational units experience some effects ‘ within density. ’ Examples have been provided in the petrochemical industry to elaborate on these effects.
Further, the authors delved into the effects of across density that affects the external networks of multinational corporations. Other critical points in the article include the centrality of power within these organizations, ‘ within density’ effect on national organization units and ‘ across density’ effects on external networks. The authors have also plotted a graph to represent the centrality measure that exists among the three network structures. Before the conclusion, the authors predict the implication of their research and recommend an option for developing the MNC network theory.