A key asset of MNCs is their ability to leverage the creativity and skills located in different parts of the world. Both multicenter and net- work modes of international operations are geared to this end. At the same time, these models imply an increased international inter- dependence within firms (Bartlett and Ghoshal ogsg: Gupta and Govindarajan 19u: Kobrin Eggt: Roth, Schweiger, and Morrison 1970. As decision-making processes are tightly coupled and as resources are or worldwide interchanged on a regional and basis, extensive collaboration mutual adjustments become necessary Ghoshal and Westney 1993). The effect is that multinational systems are likely to lose flex. ibility, especially if technocratic measures of coordination, such as plans or standard operat- ing procedures, are employed. We therefore conclude that dimension not only adds another to the difficult task of managing the delicate balance between differ- entation and integration but also to the task of finding an optimal tradeoff between stability and change. In order to benefit from international diversity, MNCs must allow for local learning and decentralized initiatives.
Yet, at the same time, MNCs must provide for closely coordinated strategies and system-wide organ- izational routines (see Kieser, Beck, and Tainio, Ch. 27 in this volume) in order to allow for concerted action and the use of internationally dispersed knowledge on a global scale. These difficulties are amplified by cultural barriers and even nationalistic issues. For one, the issue of loyalty is likely to in further local-global tensions are likely not Host-country nationals subunit only to identify with the local in which they are working but also to stronger rapport with the immediate sociocultural in other environment than with people ally parts of the world. Yet, for internation- integrated foreign subsidiaries, a high level