The role of technocratic and socio-ideological controls in managing tensions when integrating international subsidiaries

Purpose This paper aims to analyse how a multinational organisation uses technocratic and socio-ideological controls to manage tensions arising when integrating its international subsidiaries. Design/methodology/approach Through interviews and company documentation, the authors analyse how a global...

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Bibliographic Details
Published in:Qualitative research in accounting and management 2019-08, Vol.16 (3), p.434-455
Main Authors: Carlsson-Wall, Martin, Hirner, Peter, Kraus, Kalle, von Lewinski, Adrian
Format: Article
Language:English
Subjects:
Accounting
Compliance
Decentralization
Decision making
Employees
Enterprise resource planning
Foreign subsidiaries
Globalization
Ideology
International
Management controls
Multinational corporations
Performance management
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Summary:Purpose This paper aims to analyse how a multinational organisation uses technocratic and socio-ideological controls to manage tensions arising when integrating its international subsidiaries. Design/methodology/approach Through interviews and company documentation, the authors analyse how a global German family business firm integrates its international subsidiaries into the corporate context. Findings The findings suggest that technocratic and socio-ideological controls in combination help the firm manage three tensions – vertical vs lateral relations, standardisation vs differentiation of practices and centralisation vs decentralisation of decision-making – arising in the course of internationalisation. These results have important analytical implications for the understanding of how a high level of compliance to technocratic control initiatives is achieved. Prior work has, in the main, focussed on the resistance to technocratic controls without paying much attention to compliance. Specifically, the authors show how managers can use socio-ideological control to achieve a high level of compliance among employees when implementing technocratic controls. Practical implications The results suggest that managers in multinational firms need to pay careful attention to the tensions that are created when they internationalise and to apply a combination of technocratic and socio-ideological controls to manage these tensions. Originality/value There is limited knowledge of how managers use socio-ideological control to enact a particular form of experience for their employees and to create a highly valued sense of purpose. The findings suggest that these controls, in combination with technocratic ones, serve important roles when organisations expand internationally.
ISSN:1176-6093
1758-7654
1176-6093
DOI:10.1108/QRAM-05-2018-0032