In this paper, we examine in detail 35 final assembly location decisions to gain understanding of the manufacturing location decision from strategy and economic policy perspectives. We are particularly interested in the decision to locate final assembly specifically in a high‐cost (high GDP per capita) environment. In contrast with the earlier literature, we focus not just on manufacturing activities themselves, but also the key linkages between production, market, supply chain, and product development. These linkages are examined using three key concepts from theories of organization design: formalization, specificity, and coupling. Using these concepts, an analysis of the micro‐structure of each case reveals important commonalities that inform our understanding of location decisions. We conclude by discussing the policy implications of our findings.

PurposeConventional wisdom has it that cross‐functional integration is a “must”. The purpose of this paper is to take an information‐processing approach to integration and elaborate the conventional wisdom by theoretical examination of both the concept of integration as well as theoretical and empirical elaboration of its link to operational performance.Design/methodology/approachThe authors develop six propositions on how cross‐functional integration affects performance and test the propositions in an international sample of 266 manufacturing plant organizations in nine countries.FindingsThe results strongly suggest that disaggregation of performance is important, because the effects of cross‐functional integration on performance are contingent: even though the effects of achieved integration on several dimensions of operational performance are positive, the performance effect varies from one dimension to the next. This is an important finding given that performance has typically been treated at an aggregate level in prior research on the performance effects of integration.Originality/valueAlthough most research on integration has focused on the performance implications in particular, theoretical work on the nature of the integration‐performance relationship is required. In this paper, the authors argue the benefits of cross‐functional integration to be fundamentally context‐dependent and elaborate the link between integration and performance by developing the definition of the concept of integration further, as well as by disaggregation of performance, to its constituent dimensions.

This research addresses management control in the front end of innovation projects. We conceptualize and analyze PMOs more broadly than just as a specialized project-focused organizational unit. Building on theories of management control, organization design, and innovation front end literature, we assess the role of PMO as an integrative arrangement. The empirical material is derived from four companies. The results show a variety of management control mechanisms that can be considered as integrative organizational arrangements. Such organizational arrangements can be considered as an alternative to a non-existent PMO, or to complement a (non-existent) PMO's tasks. The paper also contrasts prior literature by emphasizing the desirability of a highly organic or embedded matrix structure in the organization. Finally, we propose that the development path of the management approach proceeds by first emphasizing diagnostic and boundary systems (with mechanistic management approaches) followed by intensive use of interactive and belief systems (with value-based management approaches). The major contribution of this paper is in the organizational and managerial mechanisms of a firm that is managing multiple innovation projects. This research also expands upon the existing PMO research to include a broader management control approach for managing projects in companies.

No abstract

Global sourcing refers to the integration of decision making across worldwide purchasing units within a multinational corporation (MNC). In order to manage the integration challenge, firms have a number of tools, varying from centralization and formalization to cross-locational teams. In this paper, we focus on explaining how and why to integrate in different circumstances. The aim of this paper is to complement prior research on global sourcing organizations, which is still rather scarce and more exploratory in nature. By extending the arguments of the information processing perspective of organizations to the global sourcing context, we seek to propel a theoretical discussion on integration in the global sourcing organization. Based on the results of 12 case studies in three MNCs, we propose that integration approaches in global sourcing organizations vary depending on the three contingencies of category characteristics, supply environment characteristics and interdependence of the purchasing units.A category encompasses a group of similar items that are required for specific business activities of the firm.

Project suppliers are taking increasing responsibility for their customers' businesses by servicing and operating their installed base of equipment. Simultaneously, the locus in value creation in the project suppliers' deliveries and business models has changed from short-term project deliveries to also include the operation of systems. We analyze five solutions delivered by a power plant supplier firm. The term 'solution' here refers to an offering which includes a project component and an after-delivery service component. We assess the distinctive features in the business models of the solution deliveries. This paper contributes to the existing knowledge by suggesting use of solution-specific business models with six key business model elements and by developing a typology of five solution-specific business models. The typology can also be used for assessing the performance of individual solutions. Our suggestion of a solution-specific business model is especially novel in the research of integrated solutions and business models: although existing literature argues that on a general level a firm can have several business models, prior research has not suggested the use of project specific or solution specific business models. Therefore, our finding of solution specificity of business models contributes significantly to the existing knowledge.

Dr. Jaakko Kujala is professor of project and quality management at the University of Oulu, Finland, and adjunct professor at the Aalto University. His current research interests include contextual variables in project business, business models of project-based firms, and project stakeholder management. He has published over 100 reviewed research papers, books or book chapters for example in International Journal of Project Management, Scandinavian Journal of Management and Industrial Marketing Management. Dr. Karlos Artto is a professor of project business at the Aalto University, Finland and the leader of the Project Business research group (PB). His current research interests include project business, business models of global project-based firms, governance of large and networked projects, project strategy and risk management, and new paradigms in project risk management. He has published more than 100 academic papers, book chapters and books on project business and management of project-based firms. Research highlights:-We address integration of the sales and operations interface in global project-based firms.-We elaborate the information processing model for this integration in the context of global project based firm.-We provide empirical illustrations for this integration by presenting data from three case projects.-We conclude that integration of these functions in the firm's organization is managed differently depending on the project phase.-We conclude that the differing use of integration mechanisms across project phases is associated with contextual variables. AbstractIn this paper we study the cross-functional integration of project sales and project operationstwo crucial functions when conducting business in global project-based firms. In particular we address contextual factors that are associated with integration needs among project sales and operations functions across project phases and report on how integration is managed across phases in three global projects with different contextual conditions. Using Galbraith's (1973) and Tushman & Nadler's (1978) model of the organization as an information processing system as our theoretical lens, we develop a set of propositions drawn from the general arguments of the theory and illustrated by these observations. The proposed theory underlying these propositions begins to explain how the contextual variables drive the use of different cross-functional integration mechanisms for sales and operations across project phases in global project-based firms.Subsequent research focusing on these and other key functions that require integration in different project phases can begin to validate and further elaborate this contingent framework for crossfunctional integration in global project-based firms.

No abstract