ICT deployment and resource-based power in multinational enterprises

Yamin, M. and Sinkovics, R. R. (2010) ICT deployment and resource-based power in multinational enterprises. Futures, 42(9), pp. 952-959. (doi: 10.1016/j.futures.2010.08.027)

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Applying a resource-dependency perspective to intra-multinational enterprise (MNE) power 53,54, this paper examines the effect of the deployment of advanced ICT and particularly the implementation of enterprise resource planning (ERP) systems. Although subsidiaries in the multinational do not have authority-based or ‘structural’ power with respect to key strategic decisions 6,16, they may have ‘resource-based’ power in the form of knowledge and capabilities that is of value to the multinational as a whole. Business network analysis highlights the ‘invisibility’ of the external networks (often in the host country) to the upper echelons in the multinational through which valuable subsidiary knowledge and capabilities develop. It points out that this ‘invisibility’ undermines the headquarters’ ability to control the subsidiary 3,28,36,42,68,72. In this paper we argue that the deployment of ERP undermines the resource base of subsidiary power and thus helps to restore greater central authority in the MNE. The paper reports findings from studies in twelve MNEs which have implemented ERP and points out that from the perspective of subsidiary managers a key effect of ERP deployment is the reduction in their autonomy. This may have significant adverse implications for the futures of the MNE as a federative organizational form and the legitimacy of MNE operations abroad.

Item Type:Articles
Keywords:Enterprise resource planning (ERP), resource-dependency, power, embeddedness, legitimacy, visibility, ICT, ERP, MNE, multinational enterprise.
Glasgow Author(s) Enlighten ID:Sinkovics, Professor Rudolf
Authors: Yamin, M., and Sinkovics, R. R.
College/School:College of Social Sciences > Adam Smith Business School > Management
Journal Name:Futures
ISSN (Online):1873-6378
Published Online:18 August 2010

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