The transition from a multi-domestic to globally integrated multinational enterprise – in an industry where local taste matters. (1st January 2012) - Gooderham, Paul
Existing theory suggests that multi-domestic multinational enterprises (MNEs) attempting to make the transition from the multi-domestic to the global state are confronted by two fundamental challenges: a political and a social network challenge. What is lacking is a process theory of how MNEs overcome these challenges. Adopting a theory-building approach, the purpose of this paper is to address this gap. Our setting is a Scandinavian multi-domestic MNE, SCF, which has been engaged in the transition to a distinctly more global state for nearly a decade. More specifically, we focus on the attempts by the corporate centre to integrate the purchasing activities of its group of subsidiaries. We compare its early, and largely unsuccessful, initiative to achieve purchasing integration with its more recent, largely successful, initiative. In so doing, we develop a set of propositions that provides a framework for shaping and guiding the deliberate actions of managers.