Towards an Efficient Level of Centralization in MNEs

The alignment of strategy with organizations structure, process and environment is at the heart of contingency theories. However, transition and dynamically changing environment are challenging the existing models of “strategic fit”. In this paper we explore the issue by applying the seminal model of Miles and Snow (1978) to a panel of 160 multinational enterprises, focusing on the level of centralization/decentralization of various strategic types. We find that the among prospectors, defenders, analyzers and reactors there are almost no differences in the level of centralization of various processes, which is not consistently related to organizational strategies predicted by Miles and Snow. The findings raise the question of evolving organizational structures of MNEs which would be able to respond to the changing environment.