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From Stopford and Wells's Model to Bartlett and Ghoshal's Typology: New Empirical Evidence1
Abstract
* The aim of this paper is to test whether the theoretical models concerning international structures and strategic approaches explain the behaviour of the internationalisation of firms from a newly liberalised Economy.
Key Results
* Using a sample of 117 Spanish MNC, a high correlation between the theoretical models and the development of the international strategy in the sampled firms has been validated.
Introduction
When a company establishes a foreign subsidiary new relationships will appear, forcing that company to adapt its organisational structures. In general, there is no one way to adapt to these new conditions, but there are some patterns of behaviour that have been observed in some cases. The diversification of products is related to product divisions, the diversification of markets is related to area divisions and both types of diversification are associated with matrix or mixed structures. However, it will be insufficient just to change the structure; a set of strategic variables has to be considered. These variables shape the organisational processes that flow along the structures (Bartlett 1986, Bartlett/Ghoshal 1989). Therefore, the research of organisational processes which allow the co-ordination and control of international activities has turned into one of the crucial aspects to be considered in multinational companies (Ghoshal/Nohria 1993, Nohria/Ghoshal 1994). Both the strategic approach and the organisational structure of the company have a decisive influence in these processes.
These initial models were established in the last two decades but recently a new interest in these two fields of study has developed (Egelhoff 1997, Hedlund/ Ridderstrale 1997, Hedlund 1999, Harzing 2000). Following this stream of research, the purpose of this paper is to analyse these "classical" organisational theories in the context of a newly liberalised economy.
The paper attempts to answer the following question: Are existing theories about international structures and international strategic approaches valid for the strategies of foreign investors from a newly integrated/liberalised country like Spain? The paper supports the argument that the basic underlying international strategy-structure fit seems to apply. Therefore, this research: 1) attempts to reconcile some differences in existing theory, and 2) investigates how applicable existing theory is to emerging Spanish MNCs. Moreover, the paper shows...