This study argues that a firm's product location choice may be a function of the firm's way of splitting the product market (i.e., divisionalization) and the concern for product cannibalization at the division and the firm levels. The focus of this study is at the division level and a division's new product location choice vis-à-vis its own products (intra-divisional new product distance), the products of a rival division of competing firms (inter-firm divisional new product distance), and the products of a sister division of the same firm (intra-firm divisional new product distance). The hypotheses were tested using data on the U.S. automobile industry between 1979 and 1999. The results show that a focal division with a high level of inter-firm divisional domain overlap with a rival division, relative to the focal division's own domain, is more likely to locate its new product (here new car model) closer to that rival's existing car models. And it was also found that divisional density affects a division's new product location choice. But this study didn't find any significant role of divisional status on new product location choice. And contrary to our expectation, the results of intra-firm divisional domain overlap and new product location choice suggest that inter-divisional product cannibalization might not be such an important concern when divisions introduce their new products, as we had originally expected. By addressing the firm's competitive engagement in the context of a division's new product location choice, this study expands the basic logic of market overlap at the firm level into the unit- or division-level, and highlights how a division's new product location choice is affected by intra-firm divisional structural relationship as well as interfirm divisional structural relationship. In so doing, this study hopes to contribute to the literature on divisionalization, new product location choice, competition at the unit-level, and product cannibalization, among others.

This study argues that a firm's product location choice may be a function of the firm's way of splitting the product market (i.e., divisionalization) and the concern for product cannibalization at the division and the firm levels. The focus of this study is at the division level and a division's new product location choice vis-à-vis its own products (intra-divisional new product distance), the products of a rival division of competing firms (inter-firm divisional new product distance), and the products of a sister division of the same firm (intra-firm divisional new product distance). The hypotheses were tested using data on the U.S. automobile industry between 1979 and 1999. The results show that a focal division with a high level of inter-firm divisional domain overlap with a rival division, relative to the focal division's own domain, is more likely to locate its new product (here new car model) closer to that rival's existing car models. And it was also found that divisional density affects a division's new product location choice. But this study didn't find any significant role of divisional status on new product location choice. And contrary to our expectation, the results of intra-firm divisional domain overlap and new product location choice suggest that inter-divisional product cannibalization might not be such an important concern when divisions introduce their new products, as we had originally expected. By addressing the firm's competitive engagement in the context of a division's new product location choice, this study expands the basic logic of market overlap at the firm level into the unit- or division-level, and highlights how a division's new product location choice is affected by intra-firm divisional structural relationship as well as interfirm divisional structural relationship. In so doing, this study hopes to contribute to the literature on divisionalization, new product location choice, competition at the unit-level, and product cannibalization, among others.

Background: Taking into consideration that multinational corporations (MNCs) need to not only act on a global level, but also with local adaptation, there is a need of filling out the existing gap in the theory of management control in the subject of divisionalisation.  Purpose: The research investigates the gap in the theory of management control with the lens of glocalization in order to answer and understand why MNCs do divizionalize. Methodology: Qualitative case-study based on semi-structured interviews with seven respondents with the role of global and local managers in a MNC.  Findings: The findings interpret that a MNC do divisionalize based on the seven reasons; Replication, Uniqueness, Monetary, Entrepreneurship, Agility, Sense-making and Support. Which are interpreted in the perspective of common sense and necessary tension within the organization. A contribution that is applying the glocalization perspective to the management control theory.

Made available in DSpace on 2016-04-25T18:39:37Z (GMT). No. of bitstreams: 1 Andre Luiz Azevedo Guapo.pdf: 1078558 bytes, checksum: a8eed19dc8d14cd926fc44624d76bbb9 (MD5) Previous issue date: 2011-05-09 / In multidivisional companies most part of the decision process is descentralized to the business units which usually commercialize products and services internally. The transfer prices of these products and services are part of the management control system in these multidivisional firms. As a consequence, an inappropriate transfer price methodology can result on deviations in the decison process which can generate financial losses. Having this problem in mind, this study does an evaluation of the management control systems based on transfer pricing, in order to describe best practices and deviations and understand their consequences to the organizations. With this objective, it is utilized a case study of Scania Latin America, an automobilistic company, which assembles and commercializes heavy commercial vehicles in Brazil. A comparative analysis is developed between the transfer pricing system adopted by Scania and the literature related to the subject, taking into consideration the corporate strategy of the company. The description of the processes at Scania is fundamented on interviews with the business units controllers, questionnairies applied to the divisional managers, evaluation of the observed internal procedures and the documentation got during the survey process. The evaluation of the literature is mainly based on the articles of Watson e Baumler (1975), Eccles (1983), Hill et. al. (1992) and Adler (1996), who have focused on the analysis of the transfer pricing methodologies under the context of the organization strategy. The conclusion is that Scania applies the transfer pricing as a management controll tool through a mechanism which continuously challenges the costs and prices, based on an internal negotiation process supported by benchmarking and target costing parameters. The system is aligned to the related diversified strategy and collaborative organization structure of the firm, chosen to meet to the demands of a scenario of competitive and high technology market. In addition to that, the transfer pricing system at Scania contributes to align the objectives of the central office and the business units and succeeds on creating a good performance measuring systems which motivates managers / Em empresas divisionalizadas, grande parte das decisões é descentralizada para as unidades de negócios, que normalmente transacionam internamente produtos ou serviços. Os preços de transferência desses produtos e serviços são parte do sistema de controle gerencial utilizado nessas empresas divisionalizadas. Como conseqüência, definições inadequadas desses preços de transferência podem acarretar em decisões equivocadas que podem gerar prejuízos financeiros. Tendo em mente esse problema, o presente trabalho apresenta uma avaliação do funcionamento dos sistemas de controle baseados em preços de transferência, visando apontar as melhores práticas e as possíveis distorções nesses sistemas e entender suas conseqüências. Para tanto utiliza um estudo de caso da Scania Latin América, empresa do setor automobilístico, que produz e comercializa veículos comerciais pesados no Brasil. É traçado um paralelo entre o sistema de apreçamento utilizado pela Scania, avaliado no contexto de sua estratégia organizacional, e a literatura a respeito do tema. A descrição dos processos da Scania se fundamenta em entrevistas com os controllers das unidades de negócio, questionários aplicados aos gestores dessas unidades de negócio, observação não participante dos processos e sistemas e documentação recolhida durante o estudo de caso. O referencial teórico do trabalho está principalmente baseado nos trabalhos de Watson e Baumler (1975), Eccles (1983), Hill et. al. (1992) e Adler (1996), que analisam as metodologias de apreçamento sob o aspecto da estratégia organizacional. Conclui-se que a Scania utiliza os preços de transferência como ferramenta de controle gerencial buscando desafiar continuamente custos e preços, através de um processo interno de negociação baseado em parâmetros de benchmarking e metas de produtividade. Esse sistema mostra-se alinhado a estratégia de diversificação relacionada de perfil colaborador da empresa, que visa atender às demandas de um mercado competitivo e intensivo em tecnologia. Além disso, promove a congruência de objetivos entre as unidades de negócio e alta administração, e é útil para avaliar o desempenho das subunidades, motivando o esforço gerencial

I denna uppsats studeras investeringsprocesser i det divisionaliserade företaget Södra Skogsägarna ekonomisk förening. Studiens syfte är att beskriva och förklara företagets investeringsprocesser och i vilken utsträckning dessa processer är standardiserade. I studien analyseras dessa investeringsprocesser utifrån befintlig teori. Studien visar att investeringsprocesser initieras i den operativa verksamheten för att sedan drivas fram i den operativa verksamheten och i ledningen på enhetsnivå. Beslut fattas på alla nivåer i företaget efter investeringars storlek. Vidare visar studien att det både finns stora likheter och skillnader mellan divisionernas investeringsprocesser. Likheter har ofta sin grund i företagets investeringsinstruktioner medan skillnader ofta har sin grund i divisionernas olika egenskaper och förutsättningar. / This essay studies the capital resource allocation process in the divisionalized company Södra Skogsägarna ekonomisk förening. The study aims to describe and explain the company's capital resource allocation processes and to describe and explain to what extent these processes are standardized. The study analyzes these processes using existing theory on the subject. The study shows that the capital resource allocation process is initiated by the operational levels of the firm and then integrated by the operational levels and the business unit management. Decisions are made at all levels of the company based on the capital expenditure. The study also shows that there are both major similarities and differences between the divisions’ capital resource allocation processes. The similarities are often a result of the company's capital budgeting manual while the differences often due to the different characteristics and environments of the divisions.