The multinational enterprise as a loosely coupled system: the global integration – local responsiveness dilemma

Recognizes the inherent conflict between multinationals’ (MNEs’) need to respond to local markets while using global integration to achieve economies of scale; and outlines relevant research from the fields of both economic and organizational theory. Criticizes the process approach based on normative theory and suggests that loose coupling theory is a more practical way of looking at MNEs. Discusses the application of these ideas to their management and identifies seven behavioural characteristics of loosely coupled systems (Weick). Links these to Doz and Prahalad’s (1991) criteria for assessing the applicability of organizational theory to MNEs. Considers the research implications and believes that MNE organization will eventually be seen, not as a special case, but as a general model.