Managing the Multinationals: An International Study of Control Mechanisms by Anne-Wil KatheHarzing, Cheltenham: Edward Elgar, 1999, 425 pp., ISBN 1-84064-052-9.

There is now a well-established literature on control mechanisms in multinational companies (MNCs). This book adds to this literature by attempting to prove empirically the role of international management transfers in control. It is drawn from Harzing’s doctoral research, based on a survey of MNCs headquartered in nine countries and with subsidiaries in twenty-two countries. Whilst not being a particularly “student friendly” book, and certainly not an easy read, it makes a substantive and useful contribution to the field. The book addresses a number of key questions: (1) what are the characteristics of headquarters (HQs) and subsidiaries that explain the composition of control mechanisms? (2) what is the role of international transfers in controlling subsidiaries? (3) are alternative control methods used? (4) can different MNC configurations be distinguished? and (5) do MNCs that conform to a particular configuration outperform others? After a brief introduction, Chapter 1 presents an exhaustive and thorough review of literature from three often disparate areas, which are set up as the “theoretical building blocks” of the study: (1) organization control mechanisms (drawn from organization studies); (2) MNC strategy and structure (drawn from the international management literature); and (3) MNC international transfers (drawn from the less developed but rapidly expanding literature on expatriate management). Chapter 2 then seeks to combine these three “building blocks,” examining: (1) the application of control mechanisms in MNCs; (2) the role of international transfers as a control mechanism; and (3) various ideal-type configurations of headquarters and subsidiary characteristics and control mechanisms. This involves some carefully built arguments to establish the key relationships and indicates an impressive grasp of a very wide range of literature. Chapter 3, which deals with methods, tackles the issue of how these areas might best be operationalized. It begins with a sophisticated discussion of the links between contingency theory, strategic choice, national and organizational cultures, and MNC control mechanisms, and posits neo-contingency theory as the foundation of the study; that is, the argument that organizational actors have significant degrees of strategic choice, and that although organizations are influenced by their contextual contingencies, the relationship is not deterministic and outcomes are unpredictable. So far all of this is reasonable enough, but where the methodology becomes more shaky is in the operationalization of particular concepts and their subsequent measurement through statistical analysis. Some rather sweeping decisions are taken here which underpin the whole project. First it is stated that “strategic choice is very difficult to operationalise and measure … especially when using a survey method of data collection,” and so the decision is made to “not pay specific attention to the concept of choice in the remainder of this thesis,” but merely to “keep in mind… that any relationship between culture and outcomes and contingencies and outcomes is mediated by strategic choice” (p. 166). This indicates the limitations of the methods used as against more qualitative and in-depth case study work, a weakness the author is happy to acknowledge later in the book. Second, it is confidently asserted that national cultures can be measured, although in doing so the author “had to make a number of simplifications,” and hence “for the sake of simplicity we equate nation with culture… we assume nations culturally homogenous” (p. 166). It is also assumed that what the author calls “vaguer” concepts such as strategy and control, although “perceived differently in different countries,” will nevertheless be “broadly identical in all countries” (p. 172). At least the author is prepared to accept that, in her own words, the assumption of cultures as homogenous “might stretch reality a bit” (p. 171). The key aim here is to …