Towards the Digitally-Enabled Multinational Inner Network (DEMIN)

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.

The Dark Side of Digital Globalization

“…Ben-Ner and Siemsen (2017) describe how 3D printing (or additive manufacturing) allows MNEs to adopt new forms of organization focusing much more than before on decentralized and localized production. Bolwijn, Casella and Zhan (2018) describe how digitalization leads to "decentralised production, accelerated servicification and extended disintermediation" while Fisch and Fleury (2020) show that it triggers the internal reconfiguration of MNE manufacturing plant networks.…”

“…At the same time, born digitals expanding into brick-andmortar based industries, as well as going digitals focusing on the acquisition of digital assets, still need to rely substantially on localized, complementary resources in host countries. FDI-lightness and deeper international footprints will thus emerge in parallel and co-exist (Fisch & Fleury, 2020).…”

Artificial intelligence and internet of things adoption in operations management: Barriers and benefits

“…More agile information management AI and IoT perform tasks with greater agility and lower errors, which makes management easier and faster (Wang et al, 2021). In addition to analyzing large amounts of data to learn, simulate, and share, they can be useful in planning, operation, and decision-making (Diwas, 2020;Fisch & Fleury, 2020). Competitive differentiation in the market is obtained when this set of tools is configured to process information at high speed to allow a more effective and efficient alignment between functional groups, systems, and the different functions of OM (Li, Dai et al, 2020;Thomas, 2019).…”

Barreiras e benefícios na adoção de inteligência artificial e IoT na gestão da operação

“…A IA e a IoT realizam as tarefas com maior agilidade e menores erros, o que torna o gerenciamento mais fácil e rápido (Wang et al, 2021). Além de analisarem grandes quantidades de dados para aprender, simular e compartilhar, conseguem ser úteis no planejamento, na operação e na tomada de decisões (Diwas, 2020;Fisch & Fleury, 2020). A diferenciação competitiva no mercado é obtida quando esse conjunto de ferramentas é configurado para processar as informações em alta velocidade, a fim de garantir alinhamento mais eficaz e eficiente entre os grupos funcionais, os sistemas e as diferentes funções da GO (Li, Dai et al, 2020;Thomas, 2019).…”