Functional-level transformation in multi-domestic MNCs: transforming local purchasing into globally integrated purchasing integrated purchasing

Book chapter


Elter, F., Gooderham, P. and Ulset, S. 2014. Functional-level transformation in multi-domestic MNCs: transforming local purchasing into globally integrated purchasing integrated purchasing. in: Orchestration of the Global Network Organization Emerald Group Publishing Limited.
Chapter titleFunctional-level transformation in multi-domestic MNCs: transforming local purchasing into globally integrated purchasing integrated purchasing
AuthorsElter, F., Gooderham, P. and Ulset, S.
Abstract

This paper revisits Bartlett and Ghoshal’s transnational theory of the MNC in relation to multi-domestic MNCs. We argue that the aggregate level of analysis adopted by Bartlett and Ghoshal is unhelpful for identifying significant changes in multi-domestic MNCs at the level of discrete functions. We argue that a more disaggregated level of analysis is required. Our analysis of two cases of multi-domestic MNCs that have undertaken the global integration of their locally distributed purchasing functions indicates that while significant change to the purchasing function has occurred, at the aggregate level both MNCs remain multi-domestic. In both cases the decision to integrate local purchasing was regarded as having more obvious benefits than integrating other functions such as marketing. While both of our case multi-domestic MNCs may in future choose to integrate other functions and develop into full-fledged transnational companies we argue that there is no inevitability to this. Indeed global integration may cease with the purchasing function. A second theme in this paper is that we argue that Bartlett and Ghoshal’s transnational theory has a biased view of what constitutes effective governance mechanisms for achieving global integration, local responsiveness and worldwide learning and that it would greatly benefit from a more balanced application of hierarchical and relational governance mechanisms.

LanguageEnglish
Book titleOrchestration of the Global Network Organization
PublisherEmerald Group Publishing Limited
SeriesAdvances in International Management
ISBN
Hardcover9781783509539
Publication dates
Print13 Aug 2014
Publication process dates
Deposited03 May 2016
Accepted01 Dec 2013
Output statusPublished
Accepted author manuscript
Copyright Statement

This is the accepted version of the chapter "Functional-level transformation in multi-domestic MNCs: transforming local purchasing into globally integrated purchasing integrated purchasing", published in the book "Orchestration of the Global Network Organization" available at http://doi.org/10.1108/S1571-502720140000027007. This chapter is © 2014 Emerald Group Publishing and permission has been granted for this version to appear here.

Digital Object Identifier (DOI)https://doi.org/10.1108/S1571-502720140000027007
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