Cash pooling: An organizational response to institutional complexity

Abstract The paper aims to explain how new cash management practices can be used to address institutional complexity in Multinational Enterprises (MNEs) and which are the effects on the organizational form. Based on a case study, cash pooling reveals to be an effective response for dealing with the financial crisis, even if shifting the complexity at an organizational level. Indeed, the MNE selected had to manage a centralized and decentralized organizational structure since the financial solution could not be adopted for all subsidiaries. The study shows that cash pooling can act as an organizational response only if a constant dialogue with subsidiaries is ensured.