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Innovation and control in the multinational firm: A comparison of political and contingency approaches
Author(s) -
Ambos Björn,
Schlegelmilch Bodo B.
Publication year - 2007
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.584
Subject(s) - multinational corporation , contingency , mandate , contingency theory , german , control (management) , politics , test (biology) , power (physics) , economics , industrial organization , business , management , political science , finance , law , epistemology , paleontology , philosophy , physics , archaeology , quantum mechanics , biology , history
This study focuses on control mechanisms used by multinational corporations (MNCs) to manage their extra‐national R&D units. Drawing on both the literature on organizational power and contingency theory, this study develops and empirically tests a set of hypotheses aimed at explaining how headquarters control their overseas R&D units. Data collected from 134 R&D units of German MNCs serve to test the hypotheses. Results highlight the importance of the units' R&D mandate and its interdependence in explaining control mechanisms. Moreover, they indicate a relatively weak predictive power of political approaches compared to contingency approaches. Copyright © 2007 John Wiley & Sons, Ltd.