Authors: Jonathan Whitaker; Peter Ekman; Peter Thilenius; Steve Thompson
Abstract
Multinational companies (MNCs) have been actively pursuing globally integrated
information technology (IT) as a mechanism for better coordination and control of business
processes. This paper presents a multiple case study of five MNCs’ experiences with global
IT initiatives and explores the drivers and obstacles they encountered. We conceptualize the
MNC as being embedded in internal and external business networks. These networks are
defined by transfers and exchanges taking place between corporate headquarters and the
subsidiaries, among the subsidiaries, and among the subsidiaries and their various business
partners (i.e. customers, suppliers, and non-business actors). The analysis shows that the
MNCs’ main motives for global IT can be found in the headquarter-subsidiary relationship
where IT enables the firm to obtain economies of scale and increased control which in turn
enables the MNC to become globally oriented. The subsidiary-partner relationship, as well as
other connected business relationships in the local business network, are one of the major
obstacles for global IT as local responsiveness requires a level of adaptability not inherent in
the context of global IT standards. The managerial challenge is to support the subsidiaries’
local needs and encourage inter-subsidiary information exchange while also enhancing firmwide
coordination and intra-organizational information exchange.
Keywords: Multinational company (MNC), Information technology (IT), Headquarter
control, Business relationship, Embeddedness, Case study
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Conference: Glasgow, Scotland (2011)