Geography Reference
In-Depth Information
MNE
L
A1
L
B2
L
C1
L
A2
L
B1
L
B3
L
C2
Figure 3.24
Quasi-hierarchical organizational decision-making structure
linked to each other in different ways due to technological and organiza-
tional issues which are also likely to be industry and geographic specific.
The result is that over time, as the MNE makes subsequent investments
in the alternative locations
L
Ai
,
L
Bi
, and
L
Ci
, it develops a more complex
multiplant structure. This will usually require concomitant changes in
the organizational and decision-making structure of the firm in order to
manage the more complex knowledge, information and resource flows
associated with this increased spatial complexity.
For example, in the case represented by Figure 3.24, the development
over time of seven foreign establishments in seven different locations leads
to the emergence of a quasi-hierarchical organizational and decision-
making structure in which the establishments at locations
L
A1
,
L
B2
and
L
C1
represent a second tier of decision-making, each of which reports directly
to the MNE headquarters in the country of origin, as well as mutually
coordinating decisions in the case of
L
B2
and
L
C1
. Below this level of
decision-making there are other third tier establishments
L
A2
,
L
B1
,
L
B3
, and
L
C2
, which report directly to the second tier establishments
L
B2
and
L
C1
, as
