This study examines how multinational corporations (MNCs) navigate the tension between centralization and decentralization amidst a recent wave of deglobalization, fueled by rising protectionism across the world.
The study examines globally active B2B technology companies that operate wholly-owned subsidiaries. It adopts a qualitative, multi-method approach, combining a six-month ethnography, a case study, 18 interviews with C-level and senior executives and 2 focus groups.
To rebalance centralized and decentralized structures, MNCs increasingly implement confederated communities, which are semi-autonomous, interconnected groups that handle marketing functions. Confederated communities enable companies to better address local market demands while managing the complexities associated with deglobalization and other disruptors.
This study introduces confederated communities as an emerging structural approach in MNCs. Confederated communities can be interpreted as a novel microfoundation of dynamic capabilities, which has implications for the literature streams on subsidiary autonomy, adaptation vs standardization, marketing agility and paradoxes. Furthermore, this study provides a practical framework for managing centralization–decentralization tension amidst deglobalization.
