TY  - CHAP
AB  - Purpose – The purpose of this conceptual chapter is to discuss the limitations of the network organization in multinational corporations (MNCs). Since many IB/IM publications concentrate on the advantages of this organizational form, the focus of the chapter is on identifying the limitations that MNCs need to be aware of when they use network organizations.Methodology – The analysis is based on a sound review of the literature that refers to the network organization in general and its application in MNCs.Findings – The chapter shows that MNCs present a context that can aggravate the problems of a network organization. Four types of problems are identified: (1) knowledge transfer between MNCs’ subunits, (2) trust-building and corporate culture within MNCs, (3) subsidiary development and subsidiary managers’ stress, and (4) additional problems of a more general nature.Practical implications – As a result of these problems, it is expected that the formal, hierarchical structure will remain an important organizational instrument for MNCs. The chapter specifies in which ways the formal organizational structure can help to reduce the limitations of the network organization. Finally, the chapter argues that, among the formal organizational models, the matrix structure should be considered more intensively in the future.Originality/value of chapter – Since existing discussion of the network organization in MNCs tends to ignore the limitations and downsides of this organizational form, the chapter contributes to a more balanced understanding of the network organization.
VL  - 5
SN  - 978-0-85724-088-0, 978-0-85724-087-3/1745-8862
DO  - 10.1108/S1745-8862(2010)0000005011
UR  - https://doi.org/10.1108/S1745-8862(2010)0000005011
AU  - Wolf Joachim
AU  - Egelhoff William G.
ED  - José Pla-Barber
ED  - Joaquín Alegre
PY  - 2010
Y1  - 2010/01/01
TI  - Limitations of the network organization in MNCs
T2  - Reshaping the Boundaries of the Firm in an Era of Global Interdependence
T3  - Progress in International Business Research
PB  - Emerald Group Publishing Limited
SP  - 143
EP  - 172
Y2  - 2024/04/23
ER  -