Institutional influences on manufacturing organization in multinational corporations: The 'Cherrypicking' approach

Abstract

Research on the multinational corporation (MNC) is increasingly concerned with the alleged evolution of companies towards a more standardized and rationalized global organization. Only recently, this field has been informed by alternative approaches which generate a more differentiated picture and consider the influence of divergent national institutional contexts on the multinational organization. This paper makes a contribution to this debate from a comparative institutionalist perspective by focusing on manufacturing organization within MNCs. It argues that organization structures and processes in MNCs are sector specific and influenced by national institutional features of the home and host countries. Drawing on data from a specific industrial sector, it identifies the crucial role of home country and host country embeddedness in the (re)organization of manufacturing tasks and work systems. The key question is how actors shape the interaction of these institutional pressures and, hence, manufacturing approaches, location choices and work system designs. Research in British and German subsidiaries of three MNCs suggests that, particularly at subsidiary level, MNCs apply a ‘cherrypicking’ strategy of selected use of work system elements, shaped by the host country business system. It is shown that manufacturing strategies of MNCs originating from highly coordinated business systems are highly context specific and difficult (if not impossible) to transfer elsewhere. Moreover, ‘cherrypicking’ strategies in subsidiaries embedded in such contexts turned out to be highly problematic, especially when managers attempt to combine them with group-wide standardizing work systems.

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