Critically appraise whether a multinational corporation should operate as a tightly integrated worldwide business system or whether it could be more effective to let each national subsidiary operate autonomously?

A multinational corporation is a business that operates in more than one country and has more than 25% of its revenue coming from outside of its home country. (Duesterberg, 2007, pg 13).There are over 40,000 multinational corporations currently operating in the global economy, in addition to approximately 250,000 overseas affiliates running cross-continental businesses. (Eldridge, 1999, pg 1). A multinational organisation will allow for greater economies of scale, lower labour costs, reduced manufacturing and distribution costs and access to new technologies and methods. However with multinational corporations operating a largely as they are it is important to ensure that the management of such organisations is correct. Should this management be rigid and controlled in the way of UPS where each employee is given a set of rules, or more relaxed as in the case of SOL where each employee decides their own rules? Does being a multinational organisation make a difference to this decision? One thing that is for sure if that the management has to be strong whether it be strong and uniform across all countries, or whether it is strong and very different across all countries. This essay will analyse whether all parts of a business should operate in an integrated fashion or whether it is more successful to allow individuality amongst the subsidiaries. It will look at and compare the operations of existing companies and make a decision about the best practise.

Organizations are always pulled by the two forces of uniformity and diversity. By nature they would prefer uniformity. That way lies predictability and efficiency. (Handy, 1976, pg 260). By operating in a