ICT deployment and resource-based power in multinational enterprise futures

Applying a resource-dependency perspective to intra-multinational enterprise (MNE) power 155 561 this paper examines the effect of the deployment of advanced la 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 44 70 74] 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 Crown Copyright (C) 2010 Published by Elsevier Ltd All rights reserved