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In this chapter, the author outlines the link between organization design and competitive strategy, focusing on rivalry. A firm’s organization design choices can affect its competitive advantage as well as the strategic decisions of its rivals. Therefore, organization design can influence the nature and intensity of competitive interactions between firms. To illustrate this effect, the author focuses on the literature on divisionalization and offers a set of propositions as examples. Taken together, the author makes three main observations: (1) a firm’s competitive position and objectives are reflected in its organizational choices; (2) heterogeneity in competitive position and objectives lead to heterogeneity in organization design choices across firms; and (3) organization design and competitive strategy are interdependent processes. The author concludes by discussing the implications for strategy and management research and pointing out some opportunities for future research.

Since the seminal contributions of Chandler and Williamson, a substantial body of research in industrial organization has examined the performance benefits of the organizational innovation of divisionalization. While existing empirical work has, for the most part, utilized a static framework to analyse the performance effects of divisionalization, adopts a dynamic approach, thereby allowing the intertemporal nature of any such performance benefits to be examined. Presents results from the UK manufacturing industry; the model estimated uses a spline function to incorporate differing organizational regimes over time. The results obtained are less supportive of the benefits of divisionalization than certain of the earlier empirical studies; thus the evidence presented lends no support to the view that organizational change provides unambiguous performance benefits for the firm.

This chapter investigates the role Regional Headquarters (RHQs) play in large multinationals and probes to what degree the establishment of RHQs provides hierarchy benefits according to the M-form principles. Nine large multinational corporations (MNCs) provided the empirical setting for 55 in-depth interviews with decision-makers at corporate, regional and local levels. Case reports were developed for each MNC and the industries they operated in. Observations, company documents, detailed workshops with managers and a follow-up survey within one of the MNCs complemented the data. We find evidence for benefits of hierarchy when RHQs are introduced very much along the lines of the classic M-form organisation with product divisions. However, M-form principles are taken ad absurdum by the fact that there seems to be constant reorganisation regarding the mandates and the geographic scope of the regions. The practical implications of the chapter show that MNCs need to be aware that RHQs and the regional divisions they manage seem to be more difficult to manage in a stable way than product divisions. A clear rationale needs to underlie regional groupings to minimise instability, dissatisfaction among subsidiaries and, hence, ruptures of the M-form principles. Further research is needed to compare the stability of product versus regional divisionalisation. Future research on organisational structures should focus on firm-specific definitions of regional scope.

This paper first attempts to analyze the issue of brand proliferation by a monopolist allowing transfer pricing as a channel to bridge headquarters and brand divisions, and then to view how the headquarters uses transfer pricing as a strategic device to encounter intra‐brand competition, inter‐brand competition and cross‐border profit‐shifting under an oligopolistic market.

This paper models cross‐country interactions in a Cournot‐Nash framework, and characterizes equilibrium that involves both transfer pricing and output decision. MNE's behavior is based on a two‐stage process in which the centralized headquarters' prior action on setting transfer pricing is to backup the decentralized subsidiaries in their output decision‐making.

It is demonstrated that MNEs have the incentive to manipulate their transfer prices in order to shift profit cross‐border. Higher transfer pricing enables brand divisions to collude easier in the intra‐brand competition model, and the level of transfer price hinges upon the strength of intra‐brand competition and inter‐brand competition. In addition, transfer pricing is affected by tax differences between two countries.

This paper provides the theoretical underpinning to see how headquarters may use transfer pricing as a strategic device to face intra‐ and inter‐brand competition that is visibly evident in many diverse industries.

Posits that divisionalization in companies, as we know it today, followed on from Du Pont in the 1920s, and goes on to show this in greater detail. Indicates that something eventful happened in the 1980s — management became a big and extremely lucrative business. Suggests Japanese incursions into US domestic markets caused the drop in confidence in US corporate life. Profiles the main events which changed business approaches, comparing them to jumping on the ‘bandwagon’, to catch up with the new thinking of the Japanese and others. States this is an ‘ongoing’ situation.

Little research exists on the effects of organisational structure on the public relations function. This study focuses on the effects of structural changes on an internal communication function in a large South African organisation. In this organisation internal communication consultants were appointed at divisional level. They had to oversee the election of a communication champion in each cost centre in the division. Survey research conducted 18 months after the process implementation found the structural changes led to improved information flow and face‐to‐face communication. Employees made better use of organisational media and relied less on the grapevine. Although the process made employees less fearful to speak truthfully and improved employee‐supervisor communication, these effects were less pronounced. The research confirmed the important link between public relations strategy and organisational structure, particularly for communication managers and internal communication practitioners in large organisations.

The objective of this paper is to analyze the organizational change in 100 of the largest Spanish firms (a new national context) over the period 1993‐2003 (a more recent time period).

To achieve this purpose, consideration has been given to both traditional organizational categories and new organizational forms, such as cooperative multidivisional, competitive multidivisional, and the internal network. Detailed definitions of the new organizational forms being developed by companies are provided in the paper. Thus, these new organizational forms may differ in several aspects, such as the decision‐making process and integration between divisions.

The results show that over this period, Spanish firms experienced a steadily rising trend towards divisionalization. The cooperative multidivisional structure is the one most frequently adopted in Spain, as opposed to the competitive multidivisional form and the internal network.

The systematic study of the distinctive attributes of the new forms of organization, providing accumulated knowledge, is in an emergent phase of development in the international field, and this work seeks to contribute to such development. The nature of the study strengthens the global implications of the work, and the information obtained from top practitioners in these Spanish firms enhances the contribution of the study.

Purpose – The broader aim of the research is to better understand the origins of firm heterogeneity in terms of strategy and structure, looking beyond convergence pressures resulting from economic and institutional forces.

Design/methodology/approach – To identify firm-specific differences, the paper uses an in-depth analysis of two matched cases, comparing the introduction of diversification strategies and decentralized organizational structures in two Dutch banks. Based on detailed archival research it tries to understand how different outcomes were shaped by political processes involving a variety of internal and external actors.

Findings – The research shows the importance of these processes and, in particular, the role of management succession as a trigger for organizational changes as well as the potential power of management consultants based on a combination of their own “political” skills and the opportunity provided by internal divisions. Moreover, the study confirms the view that organizational change requires a change in dominant ideology.

Research limitations/implications – The research was able to go beyond the limitations of extant studies based on cross-sectional data or single cases. It demonstrates the usefulness of historical analysis when examining changes in strategy and structure. Its results need to be confirmed by conducting similar studies in different contexts.

Originality/value – The paper provides new insights into the complex and dynamic processes of organizational change and shows how external consultants – within a specific set of circumstances – were able to manage these processes. The results are valuable to scholars studying organizational change and those looking at consultants and their role. They might also provide insights for practicing managers working or planning to work with consultants.

Popularity of the resource‐based theory of the firm has brought renewed interest in internal organisational domain as an important contributing factor toward organisational success. Generally, this research has taken the perspective that a direct link exists between internal domain and performance. An underlying premise of this view is that competitive direction is simply a reflection of the parameters of this domain. This study investigates the strength and direction of the link between internal domain and competitive direction to determine the significance of this assertion.

The purpose of this study is to understand the evolution of “marketing” in the public and corporate discourse of twentieth-century India.

The paper draws its inferences from an analysis of the digital Times of India and Financial Times historical newspaper databases, the corporate archives of two leading Mumbai-based firms – Godrej in consumer goods and Cipla in pharmaceuticals and oral histories of marketing managers.

The paper identifies four eras of “marketing” in twentieth-century India. Era I (1910-1940) saw the emergence of agricultural “marketing boards” and “marketing officers” in the public sector and the growth of Indian and multinational advertising agencies. Era II (1940-1970) witnessed the formation of management and advertising associations and business schools with close involvement of American players. In Era III (1970-1990), there was a paradigm shift as “marketing” grew in corporate discourse and firms began to employ “marketing managers” in “marketing departments”. Era IV (1990-till date) witnessed the explosion of “marketing” in public and corporate discourse alongside the consumption boom in India. The paper shows how “marketing” evolved separately in the public and private sectors and in different phases as compared to that in the West.

This paper overturns conventional wisdom on marketing history in India, which has so far discounted its significance before 1960 or accorded primary significance to the 1990s’ economic liberalisation programme.

Findings of this study will be useful to marketing professionals and teachers who wish to learn more about the history of marketing in India.

The paper uses unexplored archival material and provides the first account on the evolution of “marketing” in public and corporate discourse in twentieth-century India.