Global matrix: the strategy and structure of multinational corporations

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Copyright: Qiu, Jane Xujing
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Abstract
This thesis comprises five papers that address the gaps in the international strategy and structure literature, with particular concern given to the matrix structure used by multinational corporations (MNCs). The first paper elaborates on the idea of matrix being mainly a single hierarchy, instead of multiple hierarchies. A quantitative model is proposed to predict the information-processing capacity of the matrices, and the model is empirically supported in a secondary analysis using the data from a study on German MNCs. The second paper advances a different view of the height of the matrices: a matrix is taller than a traditional hierarchy, instead of flatter. A new formula is developed to calculate the number of hierarchical levels of an MNC that uses a matrix. The new formula shows that using a matrix results in one more hierarchical level than using a pyramidal hierarchy. The third paper revises the traditional Stopford and Wells Model (1972) into a new model that explains the strategy-structure pattern of various matrices as a group. The revised model, formed by the two strategy dimensions of global integration and area diversification, is empirically supported. All matrices, and only the matrices, are located in the “high-high” position in the model. The fourth paper develops a comprehensive strategy-structure model, the Cubic Contingency Model (CCM). In the CCM, three strategies (global integration, local responsiveness and foreign product diversification) from previous models are integrated to explain the strategy-structure fits for a wide range of MNC structures. The CCM is empirically supported as able to differentiate various structures by the combination of these three strategies. Finally, the fifth paper explores a possible new strategic dimension that has a potential impact on the amount of corporate risk that can be reduced by an MNC’s diversification strategy. Along with a critical review of the literature, this paper discusses the relationship between synchronization, corporate risk and MNC structure. New propositions are developed for future research. Overall, this thesis contributes to fields of both international business and organizational studies, by critically reviewing previous literatures, developing new theoretical arguments and presenting new empirical findings.
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Author(s)
Qiu, Jane Xujing
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Publication Year
2010
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Thesis
Degree Type
PhD Doctorate
UNSW Faculty
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