Internationalisation of Young, Fast-Growing Companies : An Exploratory Study of the Organisational Design of the Headquarters-Subsidiary Relationships

This study investigates which organisational mechanisms young, fast-growing companies choose at the onset of their internationalisation and which factors influence these choices. Existing research on the internationalisation of established companies suggests that the need for efficiency, the need for local adaptation, environmental complexity, and local resource levels are relevant factors; however, this research indicates that these factors may not be sufficient to explain the organizational design of young, fast-growing companies during their internationalisation. Case study research was undertaken on six German companies, which use the internet as the basis of their business models. The research takes into account the additional factor of resources available at corporate headquarters, particularly management capacities, as this appears to have an influence on the organisational design chosen by such companies. Furthermore, this study finds that the sooner young, fast-growing companies become international, the more they need to decentralise international headquarters-subsidiaries relationships and to use high degrees of informal coordination.(Publication abstract)