Tap your Subsidiaries by Christopher A Barlett and Sumantra Ghosh

In 1972, EMI developed the CAT scanner. This technological breakthrough

seemed to be the innovation that the U.K.-based company had long sought
in order to relieve its heavy dependence on the cyclical music and
entertainment business and to strengthen itself in international markets. The
medical community hailed the product, and within four years EMI had
established a medical electronics business that was generating 20% of the
companys worldwide earnings. The scanner enjoyed a dominant market
position, a fine reputation, and a strong technological leadership situation.

Nevertheless, by mid-1979 EMI had started losing money in this business,

and the companys deteriorating performance eventually forced it to accept
a takeover bid from Thorn Electric. Thorn immediately divested the ailing
medical electronics business. Ironically, the takeover was announced the
same month that Godfrey Hounsfield, the EMI scientist who developed the
CAT scanner, was awarded a Nobel Prize for the invention.

How could such a fairy-tale success story turn so quickly into a nightmare?
There were many contributing causes, but at the center were a structure and
management process that impeded the companys ability to capitalize on its
technological assets and its worldwide market position.

The concentration of EMIs technical, financial, and managerial resources in

the United Kingdom made it unresponsive to the varied and changing needs
of international markets. As worldwide demand built up, delivery lead times
for the scanner stretched out more than 12 months. Despite the protests of
EMIs U.S. managers that these delays were opening opportunities for
competitive entry, headquarters continued to fill orders on the basis of when
they were received rather than on how strategically important they were.
Corporate management would not allow local sourcing or duplicate
manufacturing of the components that were the bottlenecks causing delays.

The centralization of decision making in London also impaired the companys

ability to guide strategy to meet the needs of the market. For example,
medical practitioners in the United States, the key market for CAT scanners,
considered reduction of scan time to be an important objective, while EMIs
central research laboratory, influenced by feedback from the domestic
market, concentrated on improving image resolution. When General Electric
eventually brought out a competitive product with a shorter scan time,
customers deserted EMI.
In the final analysis, it was EMIs limited organizational capability that
prevented it from capitalizing on its large resource base and its strong global
competitive position. The company lacked:

The ability to sense changes in market needs and industry structure

occurring away from home.

The resources to analyze data and develop strategic responses to

competitive challenges that were emerging worldwide.

The managerial initiative, motivation, and capability in its overseas

operations to respond imaginatively to diverse and fast-changing operating
environments.

While the demise of its scanner business represents an extreme example,

the problems EMI faced are common. With all the current attention being
given to global strategy, companies risk underestimating the organizational
challenge of managing their global operations. Indeed, the top management
in almost every one of the MNCs we have studied has had an excellent idea
of what it needed to do to become more globally competitive; it was less
clear on how to organize to achieve its global strategic objectives.

United Nations Model & HQ Syndrome

Our study covered nine core companies in three industries and a dozen
secondary companies from a more diverse industrial spectrum. They were
selected from three areas of originthe United States, Europe, and Japan.
Despite this diversity, most of these companies had developed their
international operations around two common assumptions on how to
organize. We dubbed these well-ingrained beliefs the U.N. model
assumption and the headquarters hierarchy syndrome.

Although there are wide differences in importance of operations in major

markets like Germany, Japan, or the United States, compared with
subsidiaries in Argentina, Malaysia, or Nigeria, for example, most
multinationals treat their foreign subsidiaries in a remarkably uniform
manner. One executive we talked to termed this approach the U.N. model of
multinational management. Thus it is common to see managers express
subsidiary roles and responsibilities in the same general terms, apply their
planning control systems uniformly systemwide, involve country managers to
a like degree in planning, and evaluate them against standardized criteria.
The uniform systems and procedures tend to paper over any differences in
the informal treatment of subsidiaries.
When national units are operationally self-sufficient and strategically
independent, uniform treatment may allow each to develop a plan for
dealing with its local environment. As a company reaches for the benefits of
global integration, however, there is little need for uniformity and symmetry
among units. Yet the growing complexity of the corporate management task
heightens the appeal of a simple system.

The second common assumption we observed, the headquarters hierarchy

syndrome, grows out of and is reinforced by the U.N. model assumption. The
symmetrical organization approach encourages management to envision two
roles for the organization, one for headquarters and another for the national
subsidiaries. As companies moved to build a consistent global strategy, we
saw a strong tendency for headquarters managers to try to coordinate key
decisions and control global resources and have the subsidiaries act as
implementers and adapters of the global strategy in their localities.

As strategy implementation proceeded, we observed country managers

struggling to retain their freedom, flexibility, and effectiveness, while their
counterparts at the center worked to maintain their control and legitimacy as
administrators of the global strategy. Its not surprising that relationships
between the center and the periphery often became strained and even
adversarial.

The combined effect of these two assumptions is to severely limit the

organizational capability of a companys international operations in three
important ways. First, the doctrine of symmetrical treatment results in an
overcompensation for the needs of smaller or less crucial markets and a
simultaneous underresponsiveness to the needs of strategically important
countries. Moreover, by relegating the national subsidiaries to the role of
local implementers and adapters of global directives, the head office risks
grossly underutilizing the companys worldwide assets and organizational
capabilities. And finally, ever-expanding control by headquarters deprives the
country managers of outlets for their skills and creative energy. Naturally,
they come to feel demotivated and even disenfranchised.

Dispersed Responsibility
The limitations of the symmetrical, hierarchical mode of operation have
become increasingly clear to MNC executives, and in many of the companies
we surveyed we found managers experimenting with alternative ways of
managing their worldwide operations. And as we reviewed these various
approaches, we saw a new pattern emerging that suggested a significantly
different model of global organization based on some important new
assumptions and beliefs. We saw companies experimenting with ways of
selectively varying the roles and responsibilities of their national
organizations to reflect explicitly the differences in external environments
and internal capabilities. We also saw them modifying central administrative
systems to legitimize the differences they encountered.

Such is the case with Procter & Gambles European operations. More than a
decade ago, P&Gs European subsidiaries were free to adapt the parent
companys technology, products, and marketing approaches to their local
situation as they saw fitwhile being held responsible, of course, for sales
and earnings in their respective countries. Many of these subsidiaries had
become large and powerful. By the mid-1970s, economic and competitive
pressures were squeezing P&Gs European profitability. The head office in
Cincinnati decided that the loose organizational arrangement inhibited
product development, curtailed the companys ability to capture Europewide
scale economies, and afforded poor protection against competitors attempts
to pick off product lines country by country.

So the company launched what became known as the Pampers experiment

an approach firmly grounded in the classic U.N. and HQ assumptions. It
created a position at European headquarters in Brussels to develop a
Pampers strategy for the whole continent. By giving this manager
responsibility for the Europewide product and marketing strategy,
management hoped to be able to eliminate the diversity in brand strategy by
coordinating activities across subsidiary boundaries. Within 12 months, the
Pampers experiment had failed. It not only ignored local knowledge and
underutilized subsidiary strengths but also demotivated the country
managers to the point that they felt no responsibility for sales performance
of the brand in their areas.

Obviously, a different approach was called for. Instead of assuming that the
best solutions were to be found in headquarters, top management decided to
find a way to exploit the expertise of the national units. For most products,
P&G had one or two European subsidiaries that had been more creative,
committed, and successful than the others. By extending the responsibilities
and influence of these organizations, top management reasoned, the
company could make the success infectious. All that was needed was a
means for promoting intersubsidiary cooperation that could offset the
problems caused by the companys dispersed and independent operations.
For P&G the key was the creation of Eurobrand teams.

For each important brand the company formed a management team that
carried the responsibility for development and coordination of marketing
strategy for Europe. Each Eurobrand team was headed not by a manager
from headquarters but by the general manager and the appropriate brand
group from the lead subsidiarya unit selected for its success and
creativity with the brand. Supporting them were brand managers from other
subsidiaries, functional managers from headquarters, and anyone else
involved in strategy for the particular product. Team meetings became
forums for the lead-country group to pass on ideas, propose action, and
hammer out agreements.

The first Eurobrand team had charge of a new liquid detergent called Vizir.
The brand group in the lead country, West Germany, had undertaken product
and market testing, settled on the package design and advertising theme,
and developed the marketing strategy. The Eurobrand team ratified all these
elements, then launched Vizir in six new markets within a year. This was the
first time the company had ever introduced a new product in that many
markets in so brief a span. It was also the first time the company had got
agreement in several subsidiaries on a single product formulation, a uniform
advertising theme, a standard packaging line, and a sole manufacturing
source. Thereafter, Eurobrand teams proliferated; P&Gs way of organizing
and directing subsidiary operations had changed fundamentally.

On reflection, company managers feel that there were two main reasons why
Eurobrand teams succeeded where the Pampers experiment had failed. First,
they captured the knowledge, the expertise, and most important, the
commitment of managers closest to the market. Equally significant was the
fact that relationships among managers on Euro-brand teams were built on
interdependence rather than on independence, as in the old organization, or
on dependence, as with the Pampers experiment. Different subsidiaries had
the lead role for different brands, and the need for reciprocal cooperation
was obvious to everyone.

Other companies have made similar discoveries about new ways to manage
their international operationsat NEC and Philips, at L.M. Ericsson and
Matsushita, at ITT and Unilever, we observed executives challenging the
assumptions behind the traditional head officesubsidiary relationship. The
various terms they usedlead-country concept, key-market subsidiary,
global-market mandate, center of excellenceall suggested a new model
based on a recognition that their organizational task was focused on a single
problem: the need to resolve imbalances between market demands and
constraints on the one hand and uneven subsidiary capabilities on the other.
Top officers understand that the option of a zero-based organization is not
open to an established multinational organization. But they seem to have hit
on an approach that works.

Black Holes, Etc.

The actions these companies have taken suggest an organizational model of
differentiated rather than homogeneous subsidiary roles and of dispersed
rather than concentrated responsibilities. As we analyzed the nature of the
emerging subsidiary roles and responsibilities, we were able to see a pattern
in their distribution and identify the criteria used to assign them. The Exhibit
represents a somewhat oversimplified conceptualization of the criteria and
roles, but it is true enough for discussion purposes.

Exhibit Roles for national subsidiaries

The strategic importance of a specific country unit is strongly influenced by

the significance of its national environment to the companys global strategy.
A large market is obviously important, and so is a competitors home market
or a market that is particularly sophisticated or technologically advanced.
The organizational competence of a particular subsidiary can, of course, be
in technology, production, marketing, or any other area.

Strategic leader

This role can be played by a highly competent national subsidiary located in

a strategically important market. In this role, the subsidiary serves as a
partner of headquarters in developing and implementing strategy. It must
not only be a sensor for detecting signals of change but also a help in
analyzing the threats and opportunities and developing appropriate
responses.
The part played by the U.K. subsidiary of Philips in building the companys
strong leadership position in the teletext-TV business provides an illustration.
In the early 1970s, the BBC and ITV (an independent British TV company)
simultaneously launched projects to adapt existing transmission capacity to
permit broadcast of text and simple diagrams. But teletext, as it was called,
required a TV receiver that would accept and decode the modified
transmissions. For TV set manufacturers, the market opportunity required a
big investment in R&D and production facilities, but commercial possibilities
of teletext were highly uncertain, and most producers decided against
making the investment. They spurned teletext as a typical British toyfancy
and not very useful. Who would pay a heavy premium just to read text on a
TV screen?

Philips U.K. subsidiary, however, was convinced that the product had a
future and decided to pursue its own plans. Its top officers persuaded Philips
component manufacturing unit to design and produce the integrated-circuit
chip for receiving teletext and commissioned their Croydon plant to build the
teletext decoder.

In the face of poor market acceptance (the company sold only 1,000 teletext
sets in its first year), the U.K. subsidiary did not give up. It lent support to the
British governments efforts to promote teletext and make it widely
available. Meanwhile, management kept up pressure on the Croydon factory
to find ways of reducing costs and improving reception qualitywhich it did.

In late 1979, teletext took off, and by 1982 half a million sets were being sold
annually in the United Kingdom. Today almost three million teletext sets are
in use in Britain, and the concept is spreading abroad. Philips has built up a
dominant position in markets that have accepted the service. Corporate
management has given the U.K. subsidiary formal responsibility to continue
to exercise leadership in the development, manufacture, and marketing of
teletext on a companywide basis. The Croydon plant is recognized as Philips
center of competence and international sourcing plant for teletext-TV sets.

Contributor

Filling this role is a subsidiary operating in a small or strategically

unimportant market but having a distinctive capability. A fine example is the
Australian subsidiary of L.M. Ericsson, which played a crucial part in
developing its successful AXE digital telecommunications switch. The down-
under group gave impetus to the conversion of the system from its initial
analog design to the digital form. Later its engineers helped construct
several key components of the system.

This subsidiary had built up its superior technological capability when the
Australian telephone authority became one of the first in the world to call for
bids on electronic telephone switching equipment. The government in
Canberra, however, had insisted on a strong local technical capability as a
condition for access to the market. Moreover, heading this unit of the
Swedish company was a willful, independent, and entrepreneurial country
manager who strengthened the R&D team, even without full support from
headquarters.

These various factors resulted in the local subsidiary having a technological

capability and an R&D resource base that was much larger than subsidiaries
in other markets of similar size or importance. Left to their own devices,
management worried that such internal competencies would focus on local
tasks and priorities that were unnecessary or even detrimental to the overall
global strategy. But if the company inhibited the development activities of
the local units, it risked losing these special skills. Under the circumstances,
management saw the need to coopt this valuable subsidiary expertise and
channel it toward projects of corporate importance.

Implementer

In the third situation, a national organization in a less strategically important

market has just enough competence to maintain its local operation. The
market potential is limited, and the corporate resource commitment reflects
it. Most national units of most companies are given this role. They might
include subsidiaries in the developing countries, in Canada, and in the
smaller European countries. Without access to critical information, and
having to control scarce resources, these national organizations lack the
potential to become contributors to the companys strategic planning. They
are deliverers of the companys value added; they have the important task of
generating the funds that keep the company going and underwrite its
expansion.

The implementers efficiency is as important as the creativity of the strategic

leaders or contributorsand perhaps more so, for it is this group that
provides the strategic leverage that affords MNCs their competitive
advantage. The implementers produce the opportunity to capture economies
of scale and scope that are crucial to most companies global strategies.

In Procter & Gambles European introduction of Vizir, the French company

played an important contributing role by undertaking a second market test
and later modifying the advertising approach. In the other launches during
the first year, Austria, Spain, Holland, and Belgium were implementers; they
took the defined strategy and made it work in their markets. Resisting any
temptation to push for change in the formula, alteration of the package, or
adjustment of the advertising theme, these national subsidiaries enabled
P&G to extract profitable efficiencies.
The black hole

Philips in Japan, Ericsson in the United States, and Matsushita in Germany

are black holes. In each of these important markets, strong local presence is
essential for maintaining the companys global position. And in each case,
the local company hardly makes a dent.

The black hole is not an acceptable strategic position. Unlike the other roles
we have described, the objective is not to manage it but to manage ones
way out of it. But building a significant local presence in a national
environment that is large, sophisticated, and competitive is extremely
difficult, expensive, and time consuming.

One common tack has been to create a sensory outpost in the black hole
environment so as to exploit the learning potential, even if the local business
potential is beyond reach. Many American and European companies have set
up small establishments in Japan to monitor technologies, market trends, and
competitors. Feedback to headquarters, so the thinking goes, will allow
further analysis of the global implications of local developments and will at
least help prevent erosion of the companys position in other markets. But
this strategy has often been less fruitful than the company had hoped. Look
at the case of Philips in Japan.

Although Philips had two manufacturing joint ventures with Matsushita, not
until 1956 did it enter Japan by establishing a marketing organization. When
Japan was emerging as a significant force in the consumer electronics market
in the late 1960s, the company decided it had to get further into that market.
After years of unsuccessfully trying to penetrate the captive distribution
channels of the principal Japanese manufacturers, headquarters settled for a
Japan window that would keep it informed of technical developments there.
But results were disappointing. The reason, according to a senior manager of
Philips in Japan, is that to sense effectively, eyes and ears are not enough.
One must get inside the bloodstream of the business, he said, with
constant and direct access to distribution channels, component suppliers,
and equipment manufacturers.

Detecting a new development after it has occurred is useless, for there is no

time to play catch-up. One needs to know of developments as they emerge,
and for that one must be a player, not a spectator. Moreover, being confined
to window status, the local company is prevented from playing a strategic
role. It is condemned to a permanent existence as a black hole.

So Philips is trying to get into the bloodstream of the Japanese market,

moving away from the window concept and into the struggle for market
share. The local organization now sees its task as winning market share
rather than just monitoring local developments. But it is being very selective
and focusing on areas where it has advantages over strong local competition.
The Japanese unit started with coffee makers and electric shavers. Philips
acquisition of Marantz, a hi-fi equipment producer, gives it a bid to expand
on its strategic base and build the internal capabilities that will enable the
Japanese subsidiary to climb out of the black hole.

Another way to manage ones way out of the black hole is to develop a
strategic alliance. Such coalitions can involve different levels of cooperation.
Ericssons joint venture with Honeywell in the United States and AT&Ts with
Philips in Europe are examples of attempts to fill up a black hole by obtaining
resources and competence from a strong local organization in exchange for
capabilities available elsewhere.

Shaping, Building, Directing

Corporate management faces three big challenges in guiding the dispersion
of responsibilities and differentiating subsidiaries tasks. The first is in setting
the strategic direction for the company by identifying its mission and its
business objectives. The second is in building the differentiated organization,
not only by designing the diverse roles and distributing the assignments but
also by giving the managers responsible for filling them the legitimacy and
power to do so. The final challenge is in directing the process to ensure that
the several roles are coordinated and that the distributed responsibilities are
controlled.

Setting the course

Any company (or any organization, for that matter) needs a strong, unifying
sense of direction. But that need is particularly strong in an organization in
which tasks are differentiated and responsibilities dispersed. Without it, the
decentralized management process will quickly degenerate into strategic
anarchy. A visitor to any NEC establishment in the world will see everywhere
the company motto C&C, which stands for computers and communications.
This simple pairing of words is much more than a definition of NECs product
markets; top managers have made it the touchstone of a common global
strategy. They emphasize it to focus the attention of employees on the key
strategy of linking two technologies. And they employ it to help managers
think how NEC can compete with larger companies like IBM and AT&T, which
are perceived as vulnerable insofar as they lack a balance in the two
technologies and markets.

Top management at NEC headquarters in Tokyo strives to inculcate its

worldwide organization with an understanding of the C&C strategy and
philosophy. It is this strong, shared understanding that permits greater
differentiation of managerial processes and the decentralization of tasks.
But in addition to their role of developing and communicating a vision of the
corporate mission, the top officers at headquarters also retain overall
responsibility for the companys specific business strategies. While not
abandoning this role at the heart of the companys strategic process,
executives of many multinational companies are co-opting other parts of the
organization (and particularly its diverse national organizations) into
important business strategy roles, as we have already described. When it
gives up its lead role, however, headquarters management always tracks
that delegated responsibility.

Building differentiation

In determining which units should be given the lead, contributor, or follower

roles, management must consider the motivational as well as the strategic
impact of its decisions. If unfulfilled, the promise offered by the new
organization model can be as demotivating as the symmetrical hierarchy, in
which all foreign subsidiaries are assigned permanent secondary roles. For
most national units, an organization in which lead and contributor roles are
concentrated in a few favorite children represents little advance from old
situations in which the parent dominated the decision making. In any units
continually obliged to implement strategies developed elsewhere, skills
atrophy, entrepreneurship dies, and any innovative spark that existed when
it enjoyed more independence now sputters.

By dealing out lead or contributing roles to the smaller or less developed

units, even if only for one or two strategically less important products, the
headquarters group will give them a huge incentive. Although Philips N.V.
had many other subsidiaries closer to large markets or with better access to
corporate know-how and expertise, headquarters awarded the Taiwan unit
the lead role in the small-screen monitor business. This vote of confidence
gave the Taiwanese terrific motivation to do well and made them feel like a
full contributing partner in the companys worldwide strategy.

But allocating roles isnt enough; the head office has to empower the units to
exercise their voices in the organization by ensuring that those with lead
positions particularly have access to and influence in the corporate decision-
making process. This is not a trivial task, especially if strategic initiative and
decision-making powers have long been concentrated at headquarters.

NEC discovered this truth about a decade ago when it was trying to
transform itself into a global enterprise. Because NTT, the Japanese
telephone authority, was dragging its feet in converting its exchanges to the
new digital switching technology, NEC was forced to diverge from its custom
of designing equipment mainly for its big domestic customer. The NEAC 61
digital switch was the first outgrowth of the policy shift; it was aimed
primarily at the huge, newly deregulated U.S. telephone market.
Managers and engineers in Japan developed the product; the American
subsidiary had little input. Although the hardware drew praise from
customers, the switch had severe software deficiencies that hampered its
penetration of the U.S. market.

Recognizing the need to change its administrative setup, top management

committed publicly to becoming a genuine world enterprise rather than a
Japanese company operating abroad. To permit the U.S. subsidiary a greater
voice, headquarters helped it build a local software development capability.
This plus the units growing knowledge about the Bell operating companies
NECs target customersgave the American managers legitimacy and power
in Japan.

NECs next-generation digital switch, the NEAC 61E, evolved quite differently.
Exercising their new influence at headquarters, U.S. subsidiary managers
took the lead in establishing its features and specifications and played a big
part in the design.

Another path to empowerment takes the form of dislodging the decision-

making process from the home office. Ericsson combats the headquarters
hierarchy syndrome by appointing product and functional managers from
headquarters to subsidiary boards. The give-and-take in board meetings is
helpful for both subsidiary and parent. Matsushita holds an annual review of
each major worldwide function (like manufacturing and human resource
management) in the offices of a national subsidiary it considers to be a
leading exponent of the particular function. In addition to the symbolic value
for employees of the units, the siting obliges officials from Tokyo
headquarters to consider issues that the front lines are experiencing and
gives local managers the home-court advantage in seeking a voice in
decision making.

Often the most effective means of giving strategy access and influence to
national units is to create entirely new channels and forums. This approach
permits roles, responsibilities, and relationships to be defined and developed
with far less constraint than through modification of existing communication
patterns or through shifting of responsibility boundaries. Procter & Gambles
Eurobrand teams are a case in point.

Directing the process

When the roles of operating units are differentiated and responsibility is more
dispersed, corporate management must be prepared to deemphasize its
direct control over the strategic content but develop an ability to manage the
dispersed strategic process. Furthermore, headquarters must adopt a flexible
administrative stance that allows it to differentiate the way it manages one
subsidiary to the next and from business to business within a single unit,
depending on the particular role it plays in each business.

In units with lead roles, headquarters plays an important role in ensuring that
the business strategies developed fit the companys overall goals and
priorities. But control in the classic sense is often quite loose. Corporate
managements chief function is to support those with strategy leadership
responsibility by giving them the resources and the freedom needed for the
innovative and entrepreneurial role they have been asked to play.

With a unit placed in a contributor role, the head-office task is to redirect

local resources to programs outside the units control. In so doing, it has to
counter the natural hierarchy of loyalties that in most national organizations
puts local interests above global ones. In such a situation, headquarters must
be careful not to discourage the local managers and technicians so much
that they stop contributing or leave in frustration. This has happened to
many U.S. companies that have tried to manage their Canadian subsidiaries
in a contributor role. Ericsson has solved the problem in its Australian
subsidiary by attaching half the R&D team to headquarters, which farms out
to these engineers projects that are part of the companys global
development program.

The head office maintains tighter control over a subsidiary in an implementer

role. Because such a group represents the companys opportunity to capture
the benefits of scale and learning from which it gets and sustains its
competitive advantage, headquarters stresses economy and efficiency in
selling the products. Communication of strategies developed elsewhere and
control of routine tasks can be carried out through systems, allowing
headquarters to manage these units more efficiently than most others.

As for the black hole unit, the task for top executives is to develop its
resources and capabilities to make it more responsive to its environment.
Managers of these units depend heavily on headquarters for help and
support, creating an urgent need for intensive training and transfer of skills
and resources.

Firing the Spark Plugs

Multinational companies often build cumbersome and expensive
infrastructures designed to control their widespread operations and to
coordinate the diverse and often conflicting demands they make. As the
coordination and control task expands, the typical headquarters organization
becomes larger and more powerful, while the national subsidiaries are
increasingly regarded as pipelines for centrally developed products and
strategy.
But an international company enjoys a big advantage over a national one: it
is exposed to a wider and more diverse range of environmental stimuli. The
broader range of customer preferences, the wider spectrum of competitive
behavior, the more serious array of government demands, and the more
diverse sources of technological information represent potential triggers of
innovation and thus a rich source of learning for the company. To capitalize
on this advantage requires an organization that is sensitive to the
environment and responsive in absorbing the information it gathers.

So national companies must not be regarded as just pipelines but recognized

as sources of information and expertise that can build competitive
advantage. The best way to exploit this resource is not through centralized
direction and control but through a cooperative effort and co-option of
dispersed capabilities. In such a relationship, the entrepreneurial spark plugs
in the national units can flourish.