International Human Resource Management-MJ Version

action, certain goals/results/outputs are specified and monitored by reporting
systems. The terms used by various authors to describe this type of control are:
result control, plans, output control, goal setting.
Control by socialization and networks. Compared to the other categories this
control mechanism is rather informal, subtle and sophisticated. We can distin-
guish three main sub-categories in this broad category. The first is socialization,
which can be defined as ensuring that employees share organizational values
and goals, that is, are socialized into a common organization culture. Another
frequently used term is, cultural control. The second, informal, lateral or hori-
zontal exchange of information uses non-hierarchical communication as a con-
trol mechanism. Terms often used are: mutual adjustment, direct (managerial)
contact, informal communication and coordination by feedback. The third,
formalized lateral or cross-departmental relations, has the same objectives as the
second, increasing the amount of (non-hierarchical) information processing,
with the difference that in this case the relationships are (temporarily) formal-
ized within the organizational structure. Examples are task forces, cross-
functional teams, integrative departments.
Headquarters in multidomestic MNCs, in which subsidiaries are relatively
independent, operate as stand-alone companies and are very responsive to the
local market, exercising a lower level of control over their subsidiaries than
headquarters in global or transnational MNCs. If any control is exercised over
subsidiaries in multidomestic companies, headquarters chooses one of the
more indirect ways of control: output control or control by socialization and
networks.
Since subsidiaries in global and transnational companies show a higher
level of interdependence, they also show a higher level of total control. They
do differ in their preferred control mechanisms, though. Personal centralized
control is rather high for global companies as they are characterized by a

56 International Human Resource Management

Classification of control mechanisms on two dimensions

Impersonal/bureaucratic/

technocratic

Personal/cultural (founded on

(founded on social interaction) instrumental artefacts)

Direct/explicit Category 1: Personal Category 2: Bureaucratic

centralized control formalized control

Indirect/implicit Category 4: Control by Category 3: Output control

socialization and networks

TABLE 2.4