THE ROLE OF PERSONAL CONTACTS OF FOREIGN SUBSIDIARY MANAGERS IN THE COORDINATION OF INDUSTRIAL MULTINATIONALS

Abstract

This paper illuminates the distinction between individual and organizational actors in business-to-business markets as well as the coexistence of formal and informal mechanisms of coordination in multinational corporations. The main questions addressed include the following. (1) What factors influence the occurrence of personal contacts of foreign subsidiary managers in industrial multinational corporations? (2) How such personal contacts enable coordination in industrial markets and within multinational firms? The theoretical context of the paper is based on: (1) the interaction approach to industrial markets, (2) the network approach to industrial markets, and (3) the process approach to multinational management. The unit of analysis is the foreign subsidiary manager as the focal actor of a contact network. The paper is empirically focused on Portuguese sales subsidiaries of Finnish multinational corporations, which are managed by either a parent country national (Finnish), a host country national (Portuguese) or a third country national. The paper suggests eight scenarios of individual dependence and uncertainty, which are determined by individual, organizational, and/or market factors. Such scenarios are, in turn, thought to require personal contacts with specific functions. The paper suggests eight interpersonal roles of foreign subsidiary managers, by which the functions of their personal contacts enable inter-firm coordination in industrial markets. In addition, the paper suggests eight propositions on how the functions of their personal contacts enable centralization, formalization, socialization and horizontal communication in multinational corporations.

Citation

Madureira, R. (2005), "THE ROLE OF PERSONAL CONTACTS OF FOREIGN SUBSIDIARY MANAGERS IN THE COORDINATION OF INDUSTRIAL MULTINATIONALS", Woodside, A.G. (Ed.) Managing Product Innovation (Advances in Business Marketing and Purchasing, Vol. 13), Emerald Group Publishing Limited, Leeds, pp. 337-521. https://doi.org/10.1016/S1069-0964(04)13003-2