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Managing Cultural Diversity

An Empirical Examination of Cultural Networks and Organizational Structures as Governance Mechanisms in Multinational Corporations

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Martin Baumüller

The effects of globalization require that multinational corporations (MNCs) coordinate their differentiated but interdependent organizational parts and align them to a common purpose. This book examines the mechanisms that such organizations use to govern their global subsidiary networks. The book starts with a review of key concepts and theories of multinational organizations and explains the rationale for their existence. Based on this assessment and an empirical study of three globally operating entities, the author develops a framework for examining the cultural and structural governance mechanisms that multinational corporations may employ to coordinate their global operations. This framework identifies different configurations of cultural and structural governance mechanisms and explains what kind of configuration a multinational organization should employ to ensure efficient governance.