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MANAGEMENT OF INTERNATIONAL BUSINESS (MIB) Managing the Contemporary MNC: Structure, Control and Influence Course Description, Schedule and Literature Course Description Managing the multinational corporation has come a long way from the neoclassical hierarchical approaches and the rather rudimentary contingency view of the environment. Important approaches to the management of the contemporary MNC put emphasis on such concepts as ‘the network MNC’, ‘knowledge development and knowledge transfer’, ‘subsidiary evolution’ and recently the ‘role of headquarters in the modern MNC’ have revived as an important research area. In this course we will read, discuss and work with the different concepts and thereby make them familiar to the students for their future careers as managers. A central aspect in this course is to understand how differences in subsidiaries and their local business environment put constraints to headquarters managerial control. Another paramount feature of this course is subsidiary influence on strategic decisions in the MNC and subsidiary autonomy. The course starts by looking at the contemporary research approaches to the management of MNCs, and especially we will look into the Nordic approach to international business research. The course continues with a glance at some prominent theories on controlling and managing foreign operations, e.g. Agency theory. At this time of the course we are interested in how subsidiaries evolve and how they change during time. This will then be directly related to the management of the HQ – subsidiary relationship in the modern MNC. The course will end by taking a look at what is the headquarters role in the contemporary MNC. The course will contain lectures introducing the different sub-topics mentioned above and seminars where the students will present and discuss research articles, and work with assignments. The course will be examined by an individual essay type of thesis. Learning Goals The purpose of this course is to provide students with in-depth knowledge about the complexity of various organizational structures and their function in MNCs. Focus will be to develop an understanding of how different structures have evolved and how they are used to pursue different strategies. A central aspect is to understand what different control mechanisms that are used by MNCs and how they impact performance of the subsidiaries and the MNC as a whole. A second aspect is subsidiary influence and autonomy, and how headquarters can manage the contemporary MNC. After participating in the course, students will be able to: Describe and analyze the relationship between different organizational structures and their pros and cons in different situations. Explain subsidiary evolution and the management of the HQ – subsidiary relation. Explain and analyze how different control mechanisms influence the development and the performance of the MNC. Describe and recognize how subsidiaries can influence decisions not only at the local level (autonomy) but also in the MNC at large. Analyze the positive and negative effects of different co-ordination mechanisms and know in which situations and how to use them. Faculty Prof. Ulf Andersson (UA) Prof. Mats Forsgren (MF) Philip Kappen (PK) Lectures The course contains six lectures: Lecture 1: Introduction Lecture 2: Managing the MNC – a contemporary approach Lecture 3: Agency theory Lecture 4: Subsidiary Evolution Lecture 5: HQ – Subsidiary relationships Lecture 6: HQ Role in the Contemporary MNC Seminars The course contains five seminars. The students will be organized in five different groups of approximately 4 persons. Each group will be responsible for presenting the literature at one particular seminar. The seminar is organized in the following way; first the group presents a 20 – 25 minutes comment on the assigned literature which should contain a clear statement of the research problem/s in the literature, the methodology and analysis/conclusion. When the presentation concerns more than one source of literature comparing the different studies on the above mentioned areas is natural. The seminar will also include a discussion where critical issues of the literature are examined. It is paramount for the learning outcome that the seminar participants are well prepared by carefully reading the literature in advance and that the group presenting is well organized. Group exercise During the course you will in groups study and analyze a live MNC of your choice regarding its present structure and activities. You will study the MNC by digging up information starting year 1985 and analyze what have happened in terms of its internationalization, changes in structure, and present state (2005). The paper which should come out of this exercise should deal with the headquarters – subsidiary relation in terms of HQ control and subsidiary influence. It is by no means necessary to get information from every year since 1985 on all the chosen information, but rather to have a check point in the middle of the time period, e.g. (1995). For interesting situations and/or important events you will naturally use information from more years than the three mentioned above. The important thing is to look for the change in structure, scope and activities and from this conclude on its impact on the headquarters – subsidiary relation in terms of HQ control and subsidiary influence, if possible. This means that you probably will have to use assumptions about important aspects which you cannot find in the secondary sources of information. Examination Examination is based on the following: 1. Essay thesis (35%) 2. Seminars and presentations (50%) 3. Group exercise (15%)