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

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.

The Impact of Digital Capability on Manufacturing Company Performance

“…Existing research has explored the impact of digital technologies in multiple areas, including how coordination of the digital transformation of globally dispersed factories in international manufacturing networks has become a key issue for competitiveness [7]. The adoption of digital technologies improves the efficiency of organizational knowledge management, which in turn promotes product innovation, process innovation, and brings competitive advantages to companies [8].…”

The existence of Human resource development (HRD) on the development of employee creativity

“…Additionally, HRD can furnish workers with the tools and resources necessary to materialize their innovative ideas, such as access to technology, money for initiatives, and a reassuring work atmosphere that promotes risk-taking and learning from setbacks (Rodrguez-Sánchez et al, 2020b). Human resource development (HRD) can also promote an environment where employees feel comfortable working together and freely sharing their thoughts, which can result in an ever-flowing well of original concepts and answers to problems (Badasjane et al, 2022).…”

Paradoxes in the Digital Transformation of Production Systems

“…Further, they have both local (at the production site) and global (centralized and not belonging to production sites) support functions. Both companies applied the concept of core plants: dedicated production sites serving as centers of excellence, have a central role in knowledge creation and must ensure that the latest knowledge is diffused throughout the organization's production network [40][41][42].…”