Internal Business Units Research Articles

The future of supply chain - a perspective from the process and online retail industries

This paper discusses the broad challenges shared by online retail and the process industries operating global supply chains. Specifically, we discuss how process industry and online retailing differ in many aspects but have similar challenges ahead of them in order to remain competitive, keep up with the always increasing requirements of the customers and stakeholders, and gain efficiency. While both industries have been early adopters of decision support tools based on machine intelligence, both share unresolved challenges related to scalability, integration of decision-making over different time horizons (e.g., strategic, tactical and execution-level decisions) and across internal business units, and orchestration of human and computer-based decision-makers. We discuss future trends and research opportunities in the area of supply chain, and suggest that the methods of multi-agent systems supported by rigorous treatment of human decision-making in combination with machine intelligence is a great contender to address these critical challenges.

Successful Organizational Business Communication and its Impact on Business Performance: An Intra- and Inter-Organizational Perspective

Intra-firm communication is critical for building synergy amongst the internal business units of a firm, enabling employees from various functional departments and ranks to incorporate their decision-making, understanding of organizational objectives, and common norms and culture to achieve increased organizational effectiveness. This study builds on and assesses a framework of the causes and consequences of effective communication in business interactions between customer and supplier firms, as well as the path for efficient communication within a firm. The proposed study’s structural equation modeling (SEM) analysis based on 352 responses collected from firm representatives in different job positions, ranging from marketing to logistics operations, revealed that in terms of intra-organizational communication, organization characteristics and shared values, top management support and style of leadership, and information technology were all significantly related to communication effectiveness. Furthermore, the frequency and variety of interactions enhanced communication outcomes, thus improving company performance. The results revealed that cultural factors were significantly related to communication effectiveness, as well as shared beliefs and goals. The organizational factors of leadership style, top management support, and information technology were significant determinants of effective communication. Among the contextual factors, interaction frequency and diversity were found to be significant. The study also tested the relationship between supplier and supplier firm performance in the context of communication effectiveness and found that they were closely related when trust and commitment were built between business partners.

Generating Knowledge Transfers and Capital Gains: The Challenge of Corporate Venture Capital

Management scholars typically conceptualize corporate venture capital (CVC) investments as options to generate knowledge transfers from the ventures to the corporate investors but overlook that these investments also create an option to generate capital gains by exiting the ventures. We investigate when the investment paths towards knowledge transfers and exits overlap or diverge. In a novel dataset, we follow the ventures in which corporate investors in the chemical industry invested over time resulting in 2,688 venture-year combinations. We explore three investment characteristics known for facilitating the growth of ventures and estimate the effects that they have on the probability of generating a knowledge transfer and an exit. Using a bivariate probit model, we find that investing in ventures that are technologically less distant and that have many patents increases the likelihood of both a knowledge transfer and an exit. Investing in a syndicate with many co-investors increases the likelihood of an exit but decreases the likelihood of a knowledge transfer. These findings support the idea that knowledge transfers require a link between the ventures and the internal business units of the corporate investor, while exits require access to future buyers of the ventures, typically obtained by syndicating with venture capitalists. Our study therefore demonstrates the conditions under which the dual investment paths of CVC compete.

Open Innovation’s “Multiunit Back-End Problem”: How Corporations Can Overcome Business Unit Rivalry

This article examines the “multiunit back-end problem” of open innovation based on a case study of the Banque Populaire Caisse d’Epargne (BPCE) Group, a large French bank with two business units. The multiunit back-end problem occurs when internal business units who consider themselves rivals are asked to collaborate for the success of an open innovation initiative. BPCE failed several times to use external startups to accelerate its digital transformation due to rivalry between its internal business units. This article presents guidelines that firms with rival business units can use to align their front-end and back-end when working with startups to accelerate their digital transformation program.

How one supply chain integrator resolved one investor owned utility’s ageing workforce challenges using a scalable solution

The US is experiencing a large shift in its labour force due to an ageing and retiring workforce. While this change is consistent across all industries, this case study will examine its effect on one utility company’s supply chain. An influx in industry spending coupled with a labour shortage led to higher utilisation of contract workforce to alleviate labour issues. However, this model brings about new challenges such as resource, material and space shortages as the utility’s support staff is required to support both their internal employees and outside contractors. This case study will describe how the utility partnered with a supply chain integrator to develop a well-planned, flexible and scalable solution that allows the utility supply chain to focus on their internal business units’ core competencies and stakeholders while limiting costs, improving efficiencies and increasing productivity. The utility benefitted from reduced total cost of ownership, supply chain optimisation and reduced risk.

Why aren't we eating our own dog food?

CanTel was one of the fastest growing Canadian telecommunications companies that provided telephone, cable, Internet, and cloud services. In 2015, the company employed over 40,000 employees and boasted of achieving over Cdn$10 billion of annual revenue and serving over 10 million customers. As a cloud service provider, the company faced a dilemma of not being able to fulfill the IT needs of its internal business units. As a result, one of the business units, Digital Channel, resorted to a third-party cloud service, and this set an example for other business units to follow suit. Jeff Smith, the CEO of the company CanTel, and the CIO Jane Lockhart had to find a solution to the issue that had significant implications to its business-IT alignment and IT governance.

A Theoretical Model to Solve Cost Shifting Problem

Cost shifting strategy in service organizations causes difficulties between co-existing internal business units each competing for scarce resources. Within regulatory and legal constraints, cost shifting between business units instigates concomitant changes to each unit's profitability/budget-surpluses. For internal monopoly and competitive units, this strategy has shortcomings. Through management sponsored training programs, employee learning and productivity improvements offer a long-term approach to better address this short-term cost shifting problem. We mathematically model this solution, and outline further research that builds on this long-term cost shifting approach.

Benchmarking business unit governance in turbulent times: the case of Japanese firms

PurposeThe purpose of this paper is to examine how corporate headquarters control business units, the governing of which has emerged as a vital issue as business portfolios have grown increasingly complex due to diversification, globalization, and corporate group expansion via spinoffs and mergers and acquisitions.Design/methodology/approachThis study utilized questionnaire survey data from 251 firms listed on the First Section of the Tokyo Stock Exchange. The authors approached the issue of business unit governance by measuring the degree of decentralization and the intensity of monitoring, and compared the governance of internal business units with that of subsidiaries, and analyzed the impact of corporate governance characteristics on business unit governance.FindingsComparing in‐house business units and subsidiaries, the authors found a significant difference in their governance. The degree of decentralization toward subsidiaries was higher for strategic and personnel decision‐making. However, the complementarity of decentralization and monitoring was not observed for subsidiaries, whereas it was for in‐house business units. Subsidiary monitoring corresponding to decentralization was inadequate. Examining the relationship between corporate governance and business unit governance, the paper found that firms with reformed boards of directors and under a greater degree of pressure from capital markets monitored their business units more strictly.Originality/valueThe paper shows how the business portfolios and governance arrangements of Japanese firms have changed since the 1990s, and analyzes business unit governance based on valuable data obtained from a questionnaire survey.

Cloud Provider Transparency: An Empirical Evaluation

Cloud computing is quickly becoming the next wave of technological evolution as a new approach to providing IT capabilities needed by business. Driving interest and investment in cloud computing is the revolutionary change to the economic model. Cloud computing also promises to allow IT to respond more quickly to the needs of the business. Key tenets of cloud computing include being on-demand and self-service. This shift to the way that a business engages IT services creates new challenges including regulating how internal business units purchase cloud services. How does a business assess cloud providers services for security, privacy, and service levels? The purpose of this study is to develop an instrument for evaluating a cloud provider's transparency of security, privacy, and service level competencies via its self-service web portals and web publications, and then to empirically evaluate cloud service providers to measure how transparent by using the instrument.

Leadership Influence on Corporate Change Involving Distance Training

Corporate learning leaders require a unique set of skills to sustain learning programs within their organizations. Leaders must have well-planned strategies and clear direction for learning initiatives. They must understand their organization as well as their learners, and be able to skillfully deploy appropriate learning technologies. A network of relationships must be built and nurtured by corporate learning leaders to promote and sustain their programs. Leaders must adhere to well-defined procedural standards related to programs, budgets and change management. They must understand changing trends in leadership paradigms across organizational cultures. Effective corporate learning leaders must skillfully combine relationships, process, and support while continually transforming their organizations and expanding learning initiatives. Leadership Influence on Corporate Change Involving Distance Training The success and endurance of good corporate distance education programs is dependent on the strategies and strengths of good leaders. Capable leaders are necessary to all organizations. What traits and skills must good corporate learning leaders have in order to establish and sustain flourishing distance learning programs? Certainly these leaders require the skill sets of all good leaders vision, purpose, the drive to succeed, the ability to motivate others, solutions-orientation, and risk-taking. Learning leaders in these organizations require additional characteristics and skills, which can be categorized in terms of vision, relationship-building, and operational discipline (see Table 1). Table 1. Learning Leaders' Skill Domains Vision Relationship Building Operational Practice Where the business is going Senior executive management Program management discipline Strategies to develop and expand employee learning Own training department Prioritization processes Technology infrastructure support of learning plan Internal business units Technology standards for elearning Budget Information Technology Vendor standards Risk taking Communications Change management Understanding adult learners External Customers Developing a learning culture Peer Network

Benchmarking the engineer availability process

Presents the main findings of an internal and generic benchmarking exercise on the engineer availability process. This process seeks to predict customer demand in terms of the incoming call rate and match this against the available supply of engineering resources. Describes how the internal benchmarking revealed considerable differences in the way in which the different internal business units managed their engineer availability process. Explains that the main reason for the difference was in the clustering of self‐managing work groups of engineers. Also points out that there are three main elements involved in ensuring the success of an engineer availability process: an accurate forecast of customer demand; a method of operating which yields an effective revision of supply to fit customer demand; and a high support environment.

Methodology-Driven Use of Automated Support in Business Process Re-Engineering

This article describes a three-month pilot project to model and re-engineer an internal business unit of a major multinational firm using Enterprise Analyzer, a methodology and supporting group software tool for modeling and analyzing business processes. The methodology combines collaborative model building with creative problem reframing to enable multilevel, cross-functional business teams to quickly examine and redesign business processes. The tools developed for this project extend the capabilities of existing electronic meeting system technology to help groups build complex representations of their organization. The results of this pilot project suggest that the methodology and supporting tools can be effectively applied to re-engineer business processes, but also suggest the need for better ways to help groups accept innovative ideas. Many innovative ideas were generated, but few made it past the participants' evaluation and into the project's final recommendations.