Constructing power to drive strategy processes in multinational firms

This chapter explores the role of power in strategy processes. How does power work in strategy processes that attempt to encourage subsidiaries to develop autonomous strategic initiatives rather than following induced strategic guidelines? Many headquarters feel a need to choose between a paternalistic management style in which power is fairly static and based on expert knowledge located at the headquarters and a liberal style in which power is more dynamic and dispersed in order to find the optimal position between decentralized decision making and central control. This chapter shows that these two management styles can co-exist. Firms need to learn how to switch from one style to another depending on the desired knowledge process. Furthermore, complex firms need to manage the dilemma that results from the opposing tendencies of stability and change.