Marcus M. Larsen, Sept 1, 2020
One can hardly claim that the field of global strategy has become less complex as a result on the COVID-19 pandemic. The systemic disturbances caused by the COVID-19 pandemic—including the disruption of global value chains, the partial lock-down of national economies, and the wide-spread restrictions on international travel—are forcing multinational corporations (MNCs) to revisit central questions relating to their current strategies and global operations. For example, how can MNCs effectively coordinate foreign subsidiaries given the uncertainties caused by COVID-19 disruption? How do MNCs learn to manage and adapt to the rapidly changing environment? How can firms use the complexities associated with the COVID-19 pandemic as an opportunity for strategic renewal?
In this respect, we believe that our Global Strategy Journal Special Issue entitled ‘Complexity and Multinationals’ (submission deadline December 1, 2020 – the call for papers can be found here: https://www.strategicmanagement.net/gsj/overview/special-issues/open-calls) has become even more timely and important. In the Special Issue, our intention is to shed new light on the relationship between complexity and MNCs. As also evidenced by the COVID-19 pandemic, a number of political and environmental changes challenge conventional forms and effectiveness of MNCs’ organizational design. We note the following in the Call for Papers:
First, there are a number of political and environmental changes that potentially challenge conventional forms of MNCs’ organizational design, including the global value chains they orchestrate. The recent backlash against globalization with a gradual return to a more fragmented and nationally oriented economic world system could lead to higher complexity as firms need to scale back their global efforts and devise more country-by-country-oriented approaches to international business. Given the concurrent climate crisis, firms are also increasingly required to absorb and comply with new and stricter regulations on sustainability, including a higher degree of transparency and control on complex global value chains and trading relationships. Second, disruptive technological advancements including artificial intelligence, digitalization, additive manufacturing, and algorithmic decision making open up radical new ways of organizing international business activities. The speed and amount of change should also potentially fuel entrepreneurial activity, in society generally as well as more specifically by and within organizations, as new opportunities emerge and are uncovered and acted upon.
Accordingly, MNCs are increasingly required to react to, organize around, and exploit these changes caused by the rapid changes of the contemporary global economy. While concepts such as the M-form, contingency, and strategic fit have emerged as central to understanding how firms amidst high levels of complexity organize most effectively, we argue that the recent political and environmental changes necessitate a renewed inquiry of the relationship between complexity and MNC organization. As we explain in the Call for Papers:
However, when it comes to understanding how contemporary MNCs organize around (new forms of) complexity, these arguments need modification and extension. For example, the influence of different types of distances between the operations in the multinational corporation becomes highly important to discern (Asmussen, Larsen, and Pedersen, 2016). Likewise, as MNCs operate across heterogeneous locations and institutional environments (Meyer et al., 2011), the costs of coordinating the geographically dispersed activities are likely to be substantially more challenging. The combination of multiple geographically dispersed activities that may be governed in a variety of ways pose non-trivial organizational challenges in MNCs (Asmussen et al., 2009; Benito et al., 2009; Zhou, 2015). As such, while environmental, technological, and political environmental changes may provide opportunities for initiatives at various levels of the MNC, these changes also entail higher complexity that result in new managerial and organizational challenges.
Therefore, we warmly encourage submissions of both theoretical papers and empirical papers that seek to understand the relationship between complexity and organization in contemporary multinationals.
For more information about the Call for Papers, please contact the Special Issue Editors:
Julian Birkinshaw, London Business School (jbirkinshaw@london.edu),
Marcus M. Larsen, Copenhagen Business School (mml.si@cbs.dk),
Yue Maggie Zhou, Ross School of Business, University of Michigan (ymz@umich.edu), and
Gabriel R.G. Benito, BI Norwegian Business School (gabriel.r.g.benito@bi.no).