Chapter 1: Introduction: Three Organizational Challenges for Multinational Enterprises

The rapidly changing and volatile institutional environments, within which multinational enterprises (MNEs) must operate, have put traditional organizational forms under pressure. Globalization and regionalism develop at the same time, whereas regulation facilitating Foreign Direct Investment (FDI) runs parallel to “reverse measures” frustrating FDI (PIBR #7 – Van Tulder, Verbeke, & Voinea, 2012 provides an overview of mixed institutional pressures on the MNE). The leading question that this volume addresses is therefore whether there are adequate organizational responses that the MNEs can develop to these mixed pressures. How to internalize external inefficiencies, inter alia in the broader stakeholder sphere? MNEs have been responding along a variety of paths. One path has been to redraft relationships between headquarters and existing subsidiaries. Another path has been to adopt new organisational forms, both internally (team-based approaches and asymmetrical networks) and externally (advanced management of value chains and stakeholder ecosystems). As a result, new organizational arrangements have appeared, including micro-multinationals, “born globals,” springboard multinationals, as well as other types of international new ventures.