Blackwell Reference Online

Extract

As a result of disparate and changing competitive, market, and regulatory circumstances, many organizations have been pressured to adapt their resources and objectives. Such organizations have internationalized some or all of the activities comprising their value chains, often through full or partial ownership of foreign operations. Efforts to effectively manage foreign holdings may be complicated, however, by the increased strategic and operational complexity associated with coordinating and controlling activities across multiple national and competitive environments ( Bartlett and Ghoshal, 1995 ). Control is the process by which one entity uses mechanisms of a formal nature (e.g., ownership, organizational structure) or informal nature to influence the behavior and output of another entity ( Geringer and Hebert, 1989 ). Control plays a critical role in determining an organization's capacity for achieving its strategic objectives, since it affects the organization's ability to monitor, coordinate, and integrate the activities of its various business operations in a manner consistent with critical organizational and environmental variables. To fully achieve their objectives, organizations must therefore design and implement appropriate and effective control systems within and among their foreign holdings. Three complementary and interdependent dimensions comprise the foundation ... log in or subscribe to read full text