Multinational Enterprise
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The IT Phenomenon in the Multinational Enterprise Isabelle Andersson Stephanie Bennström Therése Gustafsson Maria Melander Camilla Pettersson Emma Ölund The IT Phenomenon in the Multinational Enterprise © 2012 Isabelle Andersson, Stephanie Bennström, Therése Gustafsson, Maria Melander, Camilla Pettersson and Emma Ölund Printed at Mälardalen University Press, Västerås, Sweden. 2012 Authors: Isabelle Andersson Supervisor: Cecilia Lindh Stephanie Bennström Therése Gustafsson Maria Melander Camilla Pettersson Emma Ölund Acknowledgements ABB Logica Scania Skanska EFG Bank Swedbank Plantasjen Marineparts.fi Grant Thornton Svenska Handelsbanken Powerwave Technologies Volkswagen Group Sweden Special thanks to Cecilia Lindh Madelaine Lundberg Peter Ekman Phil Holmes Foreword n the last ten years (that I have been doing research and teaching at Mälardalen University) I have studied how information technology has I become increasingly important in companies’ activities – in their daily business as well as in its implications for firms in general. What occurs to me is that, when the issue becomes a topic of academic research, information technology is studied from different perspectives in different areas of research – sometimes it is treated as a topic in itself, and sometimes as part of a business strategy or marketing activity. I have often asked myself when information technology will become regarded as an aspect of the business administration taught at universities. To some extent I think it already is, although it is not yet formally considered to be an aspect of business administration. As a lecturer, I have focused mainly on international business. In many of the seminars that I have lead, the issue of information technology has been discussed as something that the students believe will change the way that multinational enterprises can and do coordinate and control their organisations and acquire the information they need concerning their markets. (The use of information technology states that that is the case). The issue of how and to what end multinational enterprises use information technology has often been raised, but it seems that the literature comes up short in providing a holistic view of this matter. There are many studies on different aspects, and some of them present empirical data, but it seems there is a lack of major contemporary studies showing general results on the phenomenon of information technology in multinational enterprises. This is no surprise, since a study of this kind would cost a great deal of resources in terms of time as well as professors and doctoral candidates. This book is a work that partly fills the gap in the literature. It discusses and assembles literature on information technology as a feature of the multinational enterprise, but to some extent it also theorises on the role of IT in multinational enterprises. The students behind this work have carried out extensive literature reviews in many of the fields that encompass information technology in business in general and in large international companies in particular. They have arranged the literature and present it in a way they think is suitable in order to provide an overall picture of information technology in multinational enterprises. The study of the literature has thrown up questions, which have been asked of representatives of multinational companies and so “cases” are presented, i.e. examples demonstrating the use of information technology. As a whole, this book fulfils its aim, which is to present the use of information technology in multinational companies in theory and in practice and to show that information technology as used by companies is a part of business administration as we know it. Of course there are questions that remain unanswered. Some of them are stated as topics for further research at the end of this work. I feel content to use this book as a textbook on undergraduate courses dealing with the management of multinational enterprises, since the use of information technology is an important part of these. I feel proud that it is my students who (may I add, without much help from my part) have produced this work. Cecilia Lindh, supervisor Preface diting this book has opened our eyes to the subjects of Multinational Enterprises and IT. We have discovered that MNEs face many obstacles E concerning IT in their daily work, anything from cultural obstacles when communicating with their subsidiaries in various countries, to creating an integrated IT system connecting all the different parts of the enterprise. However, IT is also a major influence on MNEs, and its importance and meaning is emphasized in this book. Ways are also presented for MNEs to use IT in order to overcome obstacles and gain competitive advantages. Because of its size and complexity it is sometimes difficult to grasp the phenomenon of IT. The Phenomenon of IT in the MNE is an attempt to create an overview of this phenomenon and give an explanation of the subject through collection of theories from articles and books. The book does not offer a definitive key to the subject, but provides a starting point for further and more profound research into the connection between IT and MNEs. We are six students who all have bachelor degrees in business administration, all with individual specialisms. At first, writing an educational book for other students seemed a huge and demanding project for everybody involved, but we have all been passionate and committed to making this book possible. Hard work, long hours and dedication to the project have resulted in a book from which fellow students can learn more about IT in the Multinational Enterprise. As we all have different qualifications and educational backgrounds, each person’s skill have brought something new to the book. English is our second language and therefore writing in English has sometimes been a challenge, albeit a manageable one. This project has demanded effective teamwork from the start, something that will prove of great importance for our future professional life. A project of this magnitude also requires a great deal of independence and discipline, as well as good coordination and planning skills. All of these qualities have been developed during the course of the project. After completing this project, we all feel fulfilled and satisfied with our achievement. Our knowledge of the subject has deepened and we have developed an understanding of the complexity of the IT phenomenon. We are grateful for resources provided by Mälardalen University which have helped us to complete the book. This project would not have been possible without much helpful advice and input from Cecilia Lindh. We hope you enjoy the book. Sincerely, Isabelle, Stephanie, Therése, Maria, Camilla and Emma Table of Contents I. Introduction .......................................................................................................................................... I II. Research problem and question ................................................................................................ II III. Definitions ........................................................................................................................................ III IV. Methodology .................................................................................................................................. VII V. Framework .......................................................................................................................................... X PART I 1. History and earlier research ........................................................................................................ 1 2. The Multinational Enterprise, IT and Globalisation .......................................................... 3 2.1. Advantages from using IT ..................................................................................................... 8 2.2. Obstacles for IT use in MNEs .............................................................................................17 3. Organisational tools for the Multinational Enterprise ...................................................23 3.1. Internal communication and marketing ......................................................................23 3.2. Internal control and coordination ...................................................................................26 3.3. Enterprise Resource Planning systems ........................................................................29 3.4. Customer Relationship Management Systems ..........................................................30 3.5. Human Resource Management Systems ......................................................................31 4. Multinational Enterprises online .............................................................................................35 4.1. Electronic business ................................................................................................................37 4.2. Virtual organisations .............................................................................................................40 4.3. Social Media ...............................................................................................................................41 5. IT and the Organisational Structure .......................................................................................43 6. Roche and Blaine’s Anthology on Multinational Enterprises and IT .......................47 PART