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In a dynamic global economy, multinational corporations (MNCs) face certain competitive challenges that traditional, hierarchical "hub and spoke" organizations simply aren't geared to meet. But in this landmark work, authors Nitin Nohria and Sumantra Ghoshal present a viable alternative — the differentiated network. Writing for managers seeking changes in their administrative systems that boost firm performance, and for academics engaged in research organization design, the authors detail how the competitive MNC can fully tap the value creation potential of its globally distributed capabilities. The authors build on their premise that the units of an MNC should be organized as a differentiated network in order to optimize use of resources, encourage knowledge exchange and development, and increase innovation. By systematically grounding this core concept in organization theory and rigorously testing its validity using large sample data, they are able to offer practical application strategies. Nohria and Ghoshal draw on in-depth case studies of the organization, structures, systems, and management practices in nine large MNCs, and show why overall subsidiary performance is positively correlated with a high degree of internal differentiation and high levels of shared values across the subsidiaries. The nature and functioning of linkages within each national subsidiary, between headquarters and subsidiary, and among the subsidiaries themselves in explored in detail, as the importance of integrative mechanisms.The pioneering nature of their detailed research into the implications of organization theory allows Nohria and Ghoshal to draw the most reliable and robust real-world conclusions about the differentiated network ever available. As such, the organizational model they present in The Differentiated Network can be used by any multinational corporation seeking competitive advantage in the worldwide marketplace...today and well into the foreseeable future
The Differentiated Network.
DISTRIBUTED INNOVATION IN THE DIFFERENTIATED NETWORK.
Distributed Innovation in Multinational Corporations (MNCs).
Optimal Slack for Distributed Innovation.
Creation, Adoption, and Diffusion of Innovations Across theMNC.
DIFFERENTIATION AND INTEGRATION.
Internal Differentiation Within the MNC.
Formal Structure and Shared Values.
Integration Through Interunit Communication.
Integration Through Interpersonal Networks.
LIMITS AND EXTENSIONS OF THE DIFFERENTIATED NETWORK.
Beyond the Differentiated Network.