Institutional Influences on Manufacturing Organization in Multinational Corporations: The ‘Cherrypicking’ Approach

Research in the multinational corporation (MNC) is increasingly concerned with the alleged evolution of companies towards a more standardized and rationalized global organisation. Only recently, this field has been informed by alternative approaches generating a more differentiated picture and considering the influence of divergent national institutional contexts on the multinational organisation. This paper makes a contribution to this debate from a comparative institutionalist perspective by focusing on manufacturing organization within MNCs. It argues that organization structures and processes in MNCs are sector specific and influenced by national institutional features of the home and host countries. Based on data from a specific industrial sector it identifies the crucial role of home country and host country embeddedness for the (re-)organization of manufacturing tasks and work systems. The key question is how actors shape the interaction of both institutional pressures and, with it, manufacturing approaches, location choices and work system designs. Research in British and German subsidiaries of three MNCs suggests that in particular at subsidiary level MNCs apply a ‘cherrypicking’ strategy of selected use of work system elements, shaped by the host country business system. It is shown that manufacturing strategies of MNCs originating from highly coordinated business systems are highly context specific and difficult (if not impossible) to transfer elsewhere. Moreover, ‘cherrypicking’ strategies in subsidiaries embedded in such contexts turned out to be highly problematic, especially when managers attempt to combine them with group-wide standardising work systems. Descriptors: National business systems, work systems, enactment, Anglo-German comparison, multinational companies, manufacturing management