The theoretical framework: the guidelines from the process theory

In order to structure and analyze the empirical data related to the motivation at the individual level in organization and to describe the triggers and driving force of the changes of the mechanisms of influence in the process of internationalization, it is suggested to draw on the main concepts of process theory (Van de Ven and Poole, 1995; Poole et al., 2000; Mähring and Keil, 2008). At the same time, this theory can be applied at a micro level, explaining the social-psychological processes, focusing on behavior. This is the reason why this theory will be used in the analysis of the role of expatriates in the process of internationalization in “T”.

As it will be presented in this study, the theoretical understanding of the process of change in organizations has its roots in Van de Ven and Poole’s (1995) description of four ideal-type process theories and motors of change. The process theory consists of “four basic theories that may serve as building blocks for explaining processes of change in organizations: life cycle, teleology, dialectics,

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and evolution” (Van deVen and Poole, 1995, p. 510). These four theories represent different sequences of change events that are driven by different conceptual motors and operate at different organizational levels (Van de Ven and Poole, 1995) and introduce different explanations of change and development processes in organizations. Each process theory triggers different motors of change, which can be mapped as a distinct action cycle. However, change and development processes in organizations are often more complex than any one of these theories can offer, triggering interplay among several change motors or generating mechanisms.

I will not go into a detailed analysis of all the motors’ processes, as the main purpose of this study is to examine the mechanisms of control in the process of internationalization, with the aim of achieving influence. In this respect, after a short presentation of three of the existing motors of changes in organizations, the focus will be on the teleological motor – the motor of “the purposiveness” – that will be used as the theoretical lens for this study.

Life-cycle theory and its motors of change

Van de Ven and Poole (1995) propose that, according to life-cycle theory, changes happen as “unitary sequences that follow a single sequences of stages or phases” (ibid., p. 515), and that the sequences are of both a cumulative character, when the motors “acquired in earlier stages are retained in later stages” (ibid., p. 515), and a conjunctive character, when “the stages are related such that they derive from a common underlying process” (ibid., p. 515). Van de Ven emphasizes the importance of considering that the “trajectory to the final end state is prefigured and requires a specific historical sequence of events. Each of these events contributes a piece to the final product…each piece sets the stage for the next” (ibid., p. 515). At the same time, it is stressed that each stage of the progression is seen as “a necessary precursor of succeeding stages” (ibid., p. 515), that each successive phase is evolved from a previous stage. Thus, the life-cycle theory will “rely on logical or natural sequences”

(ibid., p. 515) in the development of the organization. In life-cycle theory, the process of change is built upon the progression of change events and is governed by the following motors: “progression through a necessary sequence of stages” (ibid., p. 520).

49 Dialectical theory and its motors

“In a dialectical process theory, stability and change are explained by reference to the balance of power between opposing entities. Struggles and accommodations that maintain the status quo between the oppositions produce stability. Change occurs when these opposing values, forces or events gain sufficient power to confront and engage the status quo. The relative power of an antithesis may mobilize an organizational entity to a sufficient degree to challenge the current thesis or state of affairs and set the stage for producing the synthesis” (Van de Ven and Poole,1995, p. 517). Nevertheless, it is pointed out that the synthesis departs from both thesis and antithesis, starting the new process of change when the synthesis becomes the new thesis in a new dialectical process. Having said that, the management literature describing the conflicts and negotiations in the organization (Neal and Northcraft, 1991) suggests that the status quo can be replaced, as long as an opposition group

“mobilizes sufficient power to simply overthrow” it (Van de Ven and Poole,1995, p. 517). In this connection, suppressing and preventing mobilization of the opposition group by “the desired creative synthesis” (ibid. p. 517) can lead to win-win solutions. It is underlined that, in terms of the organizational changes, “The maintenance of the status quo represents stability, but its replacement with either antithesis or the synthesis represents a change, for the better or worse” (ibid., p. 517). Thus, in this theory, the motors of change are conflicts and confrontations between units when opposing thesis and antithesis generate the dialectical cycle.

Evolutionary theory and its motors

According to Van de Ven and Poole (1995), “Evolution is something equated with change” (ibid., p.

517). Organizations often use evolutionary theory in order to explain the strategical processes and strategy-making, focusing on the change process through a “continuous cycle of variation, selection and retention” (ibid., p. 518). If the variations in organizations are often happen through random chance, selection “occurs principally through the competition” (ibid., p. 518), and retention engages forces “that perpetuate and maintain certain organizational forms” (ibid., p. 518). Taking into consideration that variations stimulate the selection of new forms, while retention “maintains previous forms and practices” (ibid., p. 518) (see Weick (1979) and Pfeffer (1982)), evolutionary theory can explain changes and development in organizations as “a recurrent, cumulative, and probabilistic progression of variation, selection, and retention of organizational entities” (ibid., p. 518). Despite the fact that evolutionary theory in organizational applications is often used in explaining global changes, this theory can be applied at a micro level, focusing on and explaining the social-psychological processes. This is the reason why this theory will be used in the analysis of the role of expatriates in

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the process of internationalization in “T”. In this theory, the motors of change are the repetitive sequences of variation, selection, and retention events and mechanisms of organizational entities.

Teleological theory and its motors of change – the theoretical lens of the study

According to teleological theory, the progression in organizations happens as a development towards a goal that is socially constructed and cognitively shared as a common goal or end state. “It is assumed that the entity is purposeful and adaptive; by itself or in interaction with others, the entity constructs an envisioned end state, takes actions to reach it, and monitors the progress” (ibid., p. 156). Thus, this theory considers the progress as “a repetitive sequence of goal formulation, implementation, evaluation and modification of goals based on what was learned or intended by the entity” (ibid., p. 156).

As Van de Ven and Poole (1995) pointed out, in this theory “Once on entity attains its goal, this does not mean it stays in permanent equilibrium” (ibid., p. 516) because the goals are “socially reconstructed and enacted based on the past actions” (Weick, 1979 from Van de Ven and Poole, 1995, p. 516) as sense or decision-making with clearly identifiable goals. Factors from the external environment or inside the organization “may create instabilities that push it towards a new developmental path” (ibid., p. 516), which confirms that, in this theory, “there is no prefigured rule, logically necessary direction”

(ibid., p. 516), but there is a focus on attaining the goal and the accomplished functions that should be fulfilled. The teleological theory considers “the purposiveness” (Van de Ven and Poole, 1995) of the organization as the change motor.

I rely on the guidelines from the teleological motor in process theory to identify a sequence of events in a historical retrospective, in order to define and distinguish the elements that can explain how the changes in an organization happened in the process of internationalization.

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Model 2.1. Process Theories of Organizational Development and Change

Figure 2.1. (Van de Ven and Poole, 1995)

Antecedent conditions in a process of changes in organization process theory

I rely on the guidelines from process theory (Van de Ven and Poole, 1995; Poole et al., 2000; Mähring and Keil, 2008) to identify a sequence of events in a historical retrospective to define and distinguish conditions for the changes in an organization. Van de Ven and Poole (1995) identified such conditions as determining antecedent conditions in advance of sequences of events that influence the process of changes in an organization. In this study, there will be factors from the macro and micro worlds that enforce the need to create an adequate system of controls, aiming to achieve HQ’s influence over subsidiaries.

52 2.5. Theoretical Model 2.2.

Figure 2.2. summarizes the theoretical model for this study.

I assume that, when a particular internationalization strategy is formulated and carried out, it produces effects for the organization and managers, in terms of issues around HQ’s influence and control over subsidiaries. For individual managers, those effects can also be captured in terms of perceived work situation that can be reflected by changing their mindset and behavior in relation to internationalization. In its turn, the perceived work situation can influence the choices made by managers in HQs, in respect of setting different configurations of the institution of expatriates. In their turn, the changes in the institution of expatriates can facilitate changes in the internationalization strategy.

I, therefore, have formulated the following research question: How have control mechanisms evolved during the internationalization process, and why? At the same time, I want to underline the importance of the internationalization process and the issues of HQ’s influence and control over subsidiaries, as a context for the study. In order to clarify how the context can affect: the changing of mindset; the behavior of managers in HQ in designing the strategy of internationalization that had an impact on the design of the influence and control mechanisms; and the perceived control situation that can influence the choices made by managers in HQs, in terms of setting different configurations or packages of the mechanisms of control, three sub research questions are formulated as follows: 1). How has the

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internationalization of “T” happened? 2.) What control mechanisms were in place during different phases of internationalization? 3). How have managers perceived the effects of those controls?

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