ICT deployment and resource-based power in multinational enterprises

Yamin, Mo; Sinkovics, Rudolf R.

Abstract

Applying a resource-dependency perspective to intra-multinational enterprise (MNE) power [53,54], this paper examines the effect of the deployment of advanced ICT and particularly the implementation of enterprise resource planning (ERP) systems. Although subsidiaries in the multinational do not have authority-based or ‘structural’ power with respect to key strategic decisions [6,16], they may have ‘resource-based’ power in the form of knowledge and capabilities that is of value to the multinational as a whole. Business network analysis highlights the ‘invisibility’ of the external networks (often in the host country) to the upper echelons in the multinational through which valuable subsidiary knowledge and capabilities develop. It points out that this ‘invisibility’ undermines the headquarters’ ability to control the subsidiary [3,28,36,42,68,72]. In this paper we argue that the deployment of ERP undermines the resource base of subsidiary power and thus helps to restore greater central authority in the MNE. The paper reports findings from studies in twelve MNEs which have implemented ERP and points out that from the perspective of subsidiary managers a key effect of ERP deployment is the reduction in their autonomy. This may have significant adverse implications for the futures of the MNE as a federative organizational form and the legitimacy of MNE operations abroad.

Citation

Yamin, M., & Sinkovics, R. R. (2010). ICT deployment and resource-based power in multinational enterprises. Futures, 42(9), 952-959. https://doi.org/10.1016/j.futures.2010.08.027

• Journal Article Type: Article
• Online Publication Date: Aug 18, 2010
• Publication Date: 2010-11
• Deposit Date: Jan 29, 2025
• Journal: Futures
• Print ISSN: 0016-3287
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 42
• Issue: 9
• Pages: 952-959
• DOI: https://doi.org/10.1016/j.futures.2010.08.027
• Keywords: Enterprise resource planning (ERP), resource-dependency, power, embeddedness, legitimacy, visibility, ICT, ERP, MNE, multinational enterprise
• Public URL: https://durham-repository.worktribe.com/output/2772920