Abstract
Abstract: The purpose of this paper is to contribute to the advancement of International Operations Management in the digital era. Theories and models that address how multinationals organize international operations were generated in the 1990s, a time when Kasra Ferdows wrote his HBR’s seminal article “Making the Most of Foreign Factories”. Despite the critiques, that simple and insightful model, a fruit of Ferdows’ experience, remains as paradigm but must now be updated to become aligned to the features of the digital world. In this theory-building paper, we disclose how Digital Transformation will change the location, coordination, and role of the organizational units that constitute the multinational’s inner international network (IIN). We first synthesize the digital trends into three statements that are contrasted with the assumptions of Ferdows’ model, leading to a new taxonomy. We then display pieces of evidence collected from the recent literature in different management fields. This article brings new perspectives for the understanding of how multinationals reorganize their operations, now and in the future, in times of deglobalization accelerated by pandemics.
Highlights
Digital Transformation has touched almost every aspect of human life (Schwab, 2017)
The remainder of the article proceeds as follows: In Section 2 we build the theoretical reference of International Operations Management focusing international network (IIN), foreign plant roles, Digital Transformation in terms of its enabling technologies, and the intersection of these two well-documented areas in the literature that support our Statements; in Section 3 we build the analytical model, the Digitally-Enabled Multinational Inner Network (DEMIN) and a new taxonomy for plant roles in the digital era; Section 4 brings evidence from the academic and business literature to support the Statements, model and taxonomy presented; and in Section 5 we conclude the article with our main contributions, limitations, and future research opportunities
Using Scopus database searches, we identified 2,777 articles related to International Operations Management and IINs, and 4,790 articles on Digital Transformation and Industry 4.0
Summary
Digital Transformation has touched almost every aspect of human life (Schwab, 2017). Its impacts on Operations Management have been significant, merging the physical and digital worlds, creating new possibilities to integrate machines, men, and organizations (Kagermann et al, 2013; Schwab, 2017). We will explore the limits of Ferdows’ taxonomy and build a new analytical model more apt to describe the features of international operations in the digital era – the Digitally-Enabled Multinational Inner Network (DEMIN). The remainder of the article proceeds as follows: In Section 2 we build the theoretical reference of International Operations Management focusing IINs, foreign plant roles, Digital Transformation in terms of its enabling technologies, and the intersection of these two well-documented areas in the literature that support our Statements; in Section 3 we build the analytical model, the Digitally-Enabled Multinational Inner Network (DEMIN) and a new taxonomy for plant roles in the digital era; Section 4 brings evidence from the academic and business literature to support the Statements, model and taxonomy presented; and in Section 5 we conclude the article with our main contributions, limitations, and future research opportunities
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