Content area
Full text
This paper explores the topic of normative integration and its antecedents in multinational companies. Normative integration is the convergence of objectives, values, and norms of behavior in a multinational company. The topic is under-researched and previous studies have not examined as wide a range of possible causes of normative integration as in this paper. The paper focuses on the definition of normative integration, how it relates to and differs from socialization (i.e., the process of learning about the objectives, values and behavioral patterns in an organization), its advantages and disadvantages, the methods used to create it, and its operationalization. Based on previous research, a conceptual model and related hypotheses are presented for antecedents of normative integration. According to this model, a variety of mechanisms, formal and informal, lead to employee socialization which in turn brings about normative integration in multinational companies. The paper also provides insights for operationalization of normative integration based on the conceptual model, and concludes with a discussion of useful directions for future research.
Introduction
Multinational companies (MNCs) control their subsidiaries in order to ensure that subsidiaries' behaviors and outputs align well with the goals of the MNC (Fenwick, Cieri & Welch, 1999). To this end, MNCs use three major control mechanisms: centralization, formalization, and socialization. Centralization means that decision-making is centralized, and top management at the headquarters intervenes directly in key decisions made for the subsidiaries (Bartlett, Ghoshal & Beamish, 2007). Formalization refers to the formal rules, procedures, and policies used to control the activities in the subsidiaries. However, both mechanisms have their drawbacks. Centralization can cause headquarters overload, and formalization can create inflexibility. Socialization is "the process of learning the rules and behavioral patterns appropriate to one's society" (Cavusgil, Knight & Riesenberger, 2008: 129). In the context of MNCs, socialization is the process by which employees in the subsidiaries of an MNC learn the objectives, values, and behavioral patterns that are appropriate in the culture of the MNC.
Corporate socialization seeks to create normative integration in an MNC. Birkinshaw (1999) asserted that socialization and normative integration are the same thing, - that is, that individuals' beliefs, values, and norms of behavior actually converge through the process of socialization or normative integration. However, this paper argues that socialization is...