Enforcing Global Strategies in Subsidiaries of Highly Decentralized Multinational Corporations. The Role of International Sales Managers

Abstract

Resistance of subsidiaries of multinational corporations to global coordination efforts by their headquarters is an important contemporary research subject in the field of international business studies. This case study of sales and marketing organizations in five international subsidiaries of a highly divisionalized corporation illustrates how the capabilities and the willingness to adopt and pursue global strategies is strongly influenced by local situational and organizational factors. The defining business problem was different in each country organization, ranging from product related issues such as quick innovation cycles and price competition, to economic concerns like emerging market dynamics and economic crisis, and other problems related to cultural dissimilarity. A large degree of divisionalization seems to dilute central leadership, as central managers compete for the attention and the resources of the subsidiaries and local managers behave like independent distributors, picking and choosing the most favorable offerings. In order to establish successful leadership in the absence of hierarchical control, intermediate central sales and marketing managers need to first of all internally coordinate their activities towards their local counterparts. Top management needs to establish legitimate authority of intermediate managers by clear definitions of international matrix roles and management procedures. Central sales and marketing managers need to have enough international field experience to be able to correctly assess the different local situations, advance their initiatives in a diplomatic way on all local hierarchy levels and to become overall credible and accepted partners for the local teams. Directly engaging in field activities with local customers and sales teams seems to help achieving these objectives and thus to contribute to the successful enforcement of global strategies.