As global competition increases, many MNCs must face both pressures of cost reduction and local adaptability. This study explores strategy-structure fit and strategy-culture fit in MNCs from perspective of exploration-exploitation and suggests that (1) MNCs of global strategy should adopt a centralized M-form structure and an assimilation mode of acculturation for the pursuit of organizational exploitation; (2) MNCs of multidomestic strategy should adopt a decentralized M-form structure and a separation mode acculturation for the pursuit of organizational exploration.
A common corporate culture is the glue that holds exploitative and exploratory subsidiaries together in transnational MNCs. The clue in these organizations is a reliance on a widely shared culture to promote integration across borders and to encourage identification and resource sharing. The common overall culture also provides consistence and predictability among dispersedly located subsidiaries. These firms promote both local responsiveness and global integration through consistent
cultural control. Subsidiary managers aren’t second-guessed by headquarters because strategy and information flow from the bottom up. Headquarters managers should adopt a tight-loose aspect of culture because an ambidextrous organization is supported by a common vision and appropriate variations of subcultures across subsidiaries.
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