Strategies, Decentralization, and Controls in Internationalized Finnish Firms

Data collected from 103 senior managers from 60 internationalized Finnish firms suggests that, on average, headquarters (HQs) have placed a very high weight on formal controls, and selected relatively high degrees of decision-making decentralization and multidomestic strategy. The degree of multidomestic (/global) strategy appears to partially impact the relative weight placed on controls in the performance evaluation of overseas managers. While an indirect link is not detected through decentralization, a relatively small, but statistically significant, direct link is found between the degree of multidomestic (/global) strategy and the relative weight placed on financial (/operational and behavioral) controls. This suggests that HQs may use controls to facilitate the implementation of a selected strategy, even if the degree of decentralization is not influenced by the strategy