Coordination of Digital Transformation in International Manufacturing Networks—Challenges and Coping Mechanisms from an Organizational Perspective

Viktorija Badasjane,Jessica Bruch,Anna Granlund,Mats Ahlskog

doi:10.3390/su14042204

Viktorija Badasjane, Jessica Bruch + Show 2 more

Open Access

https://doi.org/10.3390/su14042204

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Journal: Sustainability	Publication Date: Feb 15, 2022
Citations: 5	License type: CC BY 4.0

Affiliation: Mälardalen University

Abstract

Coordinating the digital transformation of globally dispersed factories within international manufacturing networks has become a critical issue for competitiveness, yet there has been limited attention paid to this issue in previous research. Therefore, the purpose of this paper is to, from an organizational perspective, explore the challenges in coordinating the digital transformation in an international manufacturing network and the coping mechanisms to overcome those challenges. A case study is conducted in a manufacturing company within the heavy vehicle industry, thus contributing to the limited empirical research covering coordination of digital transformation. The data is analyzed through organizational structure and design theory, and the findings are mapped into four core dimensions: differentiation, integration, centralization, and formalization. The results show 15 challenges and 11 coping mechanisms for coordination of digital transformation in international manufacturing networks, identifying the significance of the coordination uncertainty within the formalization dimension that is particularly exposed to the changes induced by digital transformation. The findings include the need for a coordination-oriented organizational structure that incorporates how and where coordination can be actualized. The research implications contribute with new insights by providing a detailed description of the created organizational structure and, in contrast to previous research, focuses specifically on the coordination aspect of digital transformation in an international manufacturing network.

Highlights

Coordinating globally dispersed factories belonging to an international manufacturing network (IMN) can be a source of competitiveness [1]
By using the core dimensions of the organizational structure and design theory, this paper yields a thorough description of the context of the case company and how the coordination of digital transformation is approached
One of the main findings is that a coordination-oriented organizational structure is necessary for digital transformation in an IMN

Summary

Introduction

Coordinating globally dispersed factories belonging to an international manufacturing network (IMN) can be a source of competitiveness [1]. The fundamental idea of coordinating IMNs is to create a competitive advantage by pooling resources, spreading knowledge about technology and processes, and synchronizing the distributed development activities within the IMN [2]. Coordination comes with complexity, and organizational factors are more intricate in IMNs, where new technology implementation, processes, and management innovations have more dependencies and coordination challenges [4]. The complexity of coordination of IMNs is further increased as the manufacturing industry is undergoing a digital transformation [5]. The digital transformation is a fundamental change and long-term engagement that reaches beyond digital technologies and the digitalization of factories [6]. Digital transformation is especially a challenge without a uniform solution, rules, or outcome that can

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