The Transfer of Organizational Culture Overseas: An Approach to Control in the Multinational Corporation

Organizational control has traditionally been described within the framework of the ideal type of Weberian bureaucracy, in which rules and regulations specify desired behavior, and rewards are based on explicit performance measures. This paper describes an alternative organizational ideal type that relies on an organizational culture for control. In this type of system, behavior is specified by the organizational culture, and performance is maintained via mechanisms of social pressure. An example of this letter type of control is found in the Type Z organization, an American organizational form similar in many ways to the Japanese form. Particularly interesting is the way in which a Type Z organization manages overseas subsidiaries: by establishing the organizational culture in the subsidiary. The process by which this is accomplished and by which control is maintained are described in a comparative empirical study of the headquarters and subsidiary of a firm representative of each control type. The implications of this approach for management of the multinational firm and for the host country are also discussed.© 1983 JIBS. Journal of International Business Studies (1983) 14, 91–113