Governance of Foreign Affiliates as a Distinctive Choice between Networks, Market and Hierarchy

THE FUTURE OF FOREIGN DIRECT INVESTMENT AND THE MULTINATIONAL ENTERPRISE: ESSAYS IN HONOR OF YAIR AHARONI, pp. 315-334, R. Ramamurti and N. Hashai, eds., Emerald Publishing, 2011

15 Pages Posted: 12 Oct 2011

See all articles by Lilac Nachum

Lilac Nachum

City University of New York - Allen G. Aaronson Department of Marketing & International Business

Date Written: October 12, 2011

Abstract

I argue that distinctive attributes of foreign affiliates, arising from their foreignness and multinationality, affect their choices between networks, market and hierarchy as alternative modes of governance. Comparative analyses of 193 foreign and local professional services firms in London confirm these theoretical expectations. Market relationships are the preferred mode of foreign affiliates, challenging the view of the MNEs hierarchy as a major source of resources of affiliates. I outline direction for future research that follow from this study, including further inquiry into the distinctiveness of the MNE and the study of international activities of professional services firms.

Keywords: Foreign affiliates’ choice of governance modes, market versus hierarchy versus networks, professional services, global cities

Suggested Citation

Nachum, Lilac, Governance of Foreign Affiliates as a Distinctive Choice between Networks, Market and Hierarchy (October 12, 2011). THE FUTURE OF FOREIGN DIRECT INVESTMENT AND THE MULTINATIONAL ENTERPRISE: ESSAYS IN HONOR OF YAIR AHARONI, pp. 315-334, R. Ramamurti and N. Hashai, eds., Emerald Publishing, 2011. Available at SSRN: https://ssrn.com/abstract=1943028

Lilac Nachum (Contact Author)

City University of New York - Allen G. Aaronson Department of Marketing & International Business ( email )

One Bernard Baruch Way, B12-240
New York, NY 10010-5585
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
29
Abstract Views
480
PlumX Metrics