Fortifying the organization, creating robustness
through coordination: Coupling dyadic and network
level of analysis.
MSc thesis Supply Chain Management
Faculty of Economics and Business, Rijksuniversiteit Groningen
University of Groningen
Supervisors: dr. K. Scholten & Prof. Dr. D.P. van Donk
By Justin David Aquamarijnstraat 335 9743 PH Groningen + 31 6 12696686 j.david.2@student.rug.nl S2400634 Word count: 13.621 Abstract
The aim of this research is to investigate how supply chain robustness can be achieved by intra- and inter-firm coordination in a multinational corporation (MNC) network. Coordination is defined by four mechanisms and its linkage to robustness is analyzed. The research applies an in-depth single case study whereby the unit of analysis is the MNC network, depicted by subsidiaries and the first-tier upstream suppliers. In-depth semi-structured interviews are conducted at two subsidiaries, two suppliers and the headquarter of the MNC. Findings suggest that coordination can be seen as an antecedent of robustness, intra-firm coordination inf luences inter-firm coordination. Lastly, pro-active planning inf luences resistance in the domain of robustness. This research shows the importance of coordination throughout a MNC network and provides insight in how this can influence the robustness of an organization. The originality and value of this research lies in applying a dyadic- and network level of analysis to analyse intra- and inter-firm coordination's influence on robustness in a MNC network.
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Table of content
1. Introduction ...2 2. Theoretical background...4 2.1. The MNC network...4 2.2. Coordination...5 2.3. Robustness ...8 2.4. Conceptual model ... 10 3. Methodology ... 11 3.1 Case Selection ... 11 3.2 Data collection ... 12 3.3 Data analysis ... 14 4. Results ... 164.1 The MNC: Dyadic Intra-firm perspective ... 16
4.2 The MNC and its suppliers: inter-firm coordination ... 21
4.3 Robustness of the network ... 24
5. Discussion ... 26
6. Conclusion ... 29
6.1 Managerial implications ... 30
6.2 Limitations and directions for future research ... 30
Acknowledgement ... 31
References ... 32
Appendix 1 Cover letter research ... 36
Appendix 2 Consent form... 37
Appendix 3 Interview protocol ... 38
Appendix 4 Within case analysis coordination ... 46
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1.
Introduction
A multinational corporation (MNC) can be seen as a network that is composed out of numerous subsidiaries (Tseng, 2015), and being part of a bigger network; the supply chain. Since MNCs are often geographically dispersed they face the problem that processes and information can be 'locked in' within certain units (Gupta & Govindarajan, 2000; Willem, Buelens, & Scarbrough, 2006). This raises the need to coordinate and align activities on intra- and inter-firm level to achieve the best value creation possible. Value is created by working together, and this is enabled by coordinating activities. Hereby coordination relies on four mechanisms and can be achieved via information sharing, joint-decision making, IT and contracts (Arshinder et al., 2008; Cao, Vonderembse, Zhang, & Ragu-Nathan, 2010). Besides value creation, the importance of coordination is eminent since MNCs face a context wherein intra- and inter-firm linkages need to be managed to mitigate risks in a proper way (Hohenstein, Feisel, Hartmann, & Giunipero, 2015; Xu & Beamon, 2006). Although previous research has shown the importance of coordination within MNCs (Michailova & Mustaffa, 2012; Minbaeva, 2007; Seran, Pellegrin- Boucher, & Gurau, 2014; Tseng, 2015), research on the influence of coordination towards robustness is limited.
Risks and their consequences can be severe for organizations. However, as not all potential risks and disruptions can be avoided, mitigating the impact of disruptions by being 'robust' is vital to ensure value creation (Hohenstein et al., 2015; Wieland & Wallenburg, 2012). Extant literature has shown that a state of robustness has a direct positive influence on performanc e and can be seen as a prerequisite to deal with risks and disruptions (Hohenstein et al., 2015; Wieland & Wallenburg, 2012), but to this day there seems to be a lack of understanding how robustness is created. The research of Tang (2006) identified various strategies of robustness such as applying postponement, having strategic stock (redundancy) and so on. Next to this, the research of Han & Shin (2015) showed quantifiable evaluation mechanisms and the research of Durach, Wieland, & Machuca (2015) performed a literature review identifying over 8 antecedents relating to domains of intra- and inter-organizational robustness. Consequently, this research views robustness as the ability of maintaining functionality despite the impact of disruptions. This is enabled by pro-active planning for- and resistance during disruptions. Where supply chains are getting more complex, it is argued that more efforts and activities are required to synchronize and coordinate activities to maintain value creation and mitigate disruptions (Meepetchdee & Shah, 2007). Thus, when coordination fails, the supply chain becomes more vulnerable to disruptions that either occur, or originate, at entities in the network (Durach et al., 2015).
Thereby, previous defined antecedents of robustness, e.g. information sharing, collaboration and visibility show overlap with mechanisms of coordination. Yet considering coordination as one realm within an MNC network and analyzing its inf luence on robustness has not yet received attention (Christopher, Mena, Khan, & Yurt, 2011; Hohenstein et al., 2015; Seran et al., 2014). While various researchers have written on the inter-firm perspective of coordination (Arshinder et al., 2008; Lehoux, D’Amours, & Langevin, 2014) this research enters a domain with a twofold perspective: intra- and inter-firm coordination. Thereby the novelty of this research, and what has not yet received attention in literature, is combining perspectives of intra- and inter-firm coordination towards robustness in a MNC network. Therefore this research links these aspects by answering the following research question:
3 From extant literature we can derive that coordination is important in every business context and can enable the sharing of information, aligning incentives and working together towards the same goals (Arshinder et al., 2008; Lehoux et al., 2014). This has its roots in the reciprocity between the four previously mentioned mechanisms (Arshinder et al., 2008). Thereby robustness, in a supply chain context, relies on multiple entities working together. This involves coordination to align activities and synchronize operations to mitigate the impact of possible disruptions (Brandon-Jones, Squire, Autry, & Petersen, 2014). What has not yet been touched upon in extant literature is the relationship of how and why intra- and inter-firm coordination can lead to robustness in a MNC network, being the contribution of this article to theory.
Coordination leading to robustness in a MNC network, is relatively new and not completely understood. Therefore a single-case study is applied to gain rich and in-depth insights (Voss, Tsikriktsis, & Frohlich, 2002). To embrace the intra- and inter-firm perspectives and relate that to answering the research question, this research applies a dyadic- and network-level analysis inspired by the research of Wilhelm (2011). Thereby this research contributes to current literature in several ways. First it creates a deeper understanding of the intra- and inter- firm coordination mechanisms and their interrelatedness, in a MNC network. Second, it enriches literature by gaining new insights on the influence of coordination towards robustness in a network structure.
In doing so, robustness is based on maintaining functionality by pro-active planning and resistance and this allows analyzing the relationships between these concepts. The novelty of this research lies merging of fields of literature on MNCs, coordination and robustness in one. The practical contribution lies in identifying coordination possibilities and mechanisms between subsidiaries and suppliers and subsequently aligning actions to achieve a state of robustness.
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2.
Theoretical background
2.1. The MNC network
The operating environment of a MNC is full of differences in regulations, taxes, demand, market imperfections and cultures. While this can be labelled as a 'spiky' environment, this is opposing to the goal of MNCs to create a 'flat world' by means of a 'frictionless operating system' (Buckley, 2011). A frictionless operating system stands for aligned activities to synchronize and coordinate activities to create the best value possible (Meepetchdee & Shah, 2007). Hereby MNCs rely on the sharing of knowledge, which basically means the sharing of valuable information and communicating on a frequent basis about ongoing operations. As such MNCs are conceptualized in literature as organizations that rely on knowledge as an important strategic resource (Michailova & Mustaffa, 2012; Noorderhaven & Harzing, 2009). The ability to acquire, share and utilize knowledge is said to be one of the most, if not the most, important aspects of competitive advantage for MNCs (Crespo, Griffith, & Lages, 2014; Gupta & Govindarajan, 2000; Noorderhaven & Harzing, 2009). While knowledge is important, the sharing of it is even more important and herein coordination mechanisms are required to transfer and utilize this across departments and organizations (Tsai, 2002).
The importance of coordination is eminent s ince a MNC can be considered as a complex network consisting of multiple geographically dispersed production facilities and product divisions. The complexity lies in the large number of units that interact with each other (Celo, Nebus, & Kim Wang, 2015) and the issue arises that the decisions made by one subsidiary can influence the operations of the other subsidiary. The consequence is that subsidiaries work with their own 'agenda' and set of goals and thereby create an environment with tensions. These tensions are generated by a mixture of competition and cooperation within the MNC (Mudambi & Navarra, 2004). Therefore the main challenge for MNCs is to apply mechanisms that facilitate the creation, development and sharing of processes on multiple levels (Crespo et al., 2014; Fey & Furu, 2008) as decisions made by the subsidiaries can affect the MNC as a whole (O’Donnell, 2000). Hereby the foundation of information flows and exchanges lay in control and coordination mechanisms and these allow the MNC to leverage competencies across geographically dispersed locations (Gupta & Govindarajan, 2000). In supply chain literature it is stated that coordinating intra-firm activities, such as information sharing and IT integration, is essential for an organization to remain competitive (Javernick-Will, 2011; Wong, Lai, & Cheng, 2011). Therefore, having intra-firm coordination can be seen as a prerequisite to deal with tensions (Hohenstein et al., 2015) and operates on a 'horizontal level' as seen in figure 1.
In addition to internal (horizontal) coordination, MNCs are also part of wider network and need to coordinate with external supply chain partners. A MNC operates in the supply chain and thus dependencies upon other organizations create the need to strategically coordinate activities to address challenges that might arise (Xu & Beamon, 2006) and to achieve mutually defined goals (Datta & Christopher, 2011; Simatupang & Sridharan, 2002)
5 The linkages shown in figure 1 resemble coordination on both (1) intra-firm level and (2) inter-firm level in the MNC network. While var ious approaches can be thought of to align decisions, such as monitoring and incentive alignment, the foundation remains in the coordination of activities.
2.2. Coordination
Following the aforementioned, and creating clarity on the definitions used in this research, w orking together is a key element in operations literature and can be seen in two related forms: collaboration and coordination (Arshinder et al., 2008; M. Cao et al., 2010; Lehoux et al., 2014). Various authors identified advantages of working together with other organizations to increase competitiveness, responding faster to change, gaining economies of scale and having cost sharing activities ( Barratt, 2004; MacCarthy & Jayarathne, 2012; Simatupang & Sridharan, 2002) . Coordination requires organisations to share information, align incentives and work together towards the same goals (Lehoux et al., 2014) and herein an overlap arises with the term collaboration (Arshinder et al., 2008). Following the well-cited perspective of Malone & Crowston (1994) who define coordination as ''the act of managing dependencies between entities and the joint effort of
entities working together towards mutually defined goals'' (Arshinder et al., 2008, p. 318; Malone &
Crowston, 1994), coordination relies on information sharing, synchronized activities and the afore mentioned collaborative aspects (Arshinder et al., 2008; Lehoux et al., 2014). In literature there is no universal accepted unique definition of collaboration or coordination. Yet, both share the perspective on the mutual availability of information, exchange of information and working jointly to execute supply chain (SC) operations such that a win-win situation is created (Arshinder et al., 2008; M. Cao et al., 2010; T.M. Simatupang & Sridharan, 2002; Skjoett-Larsen, 2000). Thus this research follows the perspective of Malone & Crowston (1994) and uses coordination as the main terminology.
While there is no unique set of mechanisms on coordination, the research of Arshinder et al., (2008) defined four mechanisms on supply chain coordination which are commonly acknowledged throughout literature. Relating back to figure 1, these four mechanisms are focussed on inter-firm coordination (Arshinder et al., 2008) and within this research they also fit with the context of intra-firm coordination. This is because subsidiaries can be seen as supply chain members, operating within the same tier; the MNC. The four mechanisms are: (1) Information sharing, (2) Joint-decision making, (3) IT and (4) Contracts, following the work of Arshinder et al. (2008).
These four coordination mechanisms are defined in table 1 and show the perspective of both intra-firm and inter-firm coordination. Differences occur in the definitions of joint-decision making, IT and contracts because of the distinct perspective.
Coordination mechanisms
6 Following information sharing, joint-decision making refers to the process of coherent decision making wherein supply chain partners, i.e. subsidiaries and suppliers, orchestrate decisions in planning and operations (Arshinder et al., 2008; Cao et al., 2010). On both perspectives of intra- and inter-firm there are decisions to be made concerning the planning of operations; demand forecasting, production planning and logistics. Hereby joint-decision making aligns entities towards the same objectives and goals. Over the last years, different approaches to joint-decision making have been proposed, such as VMI and CPFR (see table 1), which facilitate information sharing and aligning network activities (Lehoux et al., 2014). The importance of joint-decision making is eminent due to the conflicting goals and decision making that supply chain partners can have, leading to less than optimal solutions (Lee, Padmanabhan, & Whang, 1997). Therefore supply chain partners, horizontal or vertical, should coordinate critical decisions to create most value, or conversely, mitigate negative impacts on performance.
Following joint-decision making and information sharing, IT is considered an enabler of the two since it allows organizations to provide real time supply chain information, facilitating management and control of activities (Cannella, Framinan, & Barbosa-Póvoa, 2014). Extant literature shows that the application of IT among supply chain partners improved coordination (Arshinder et al., 2008; Frohlich, 2002; Sanders, 2008). This is due to the usage of IT in organizations whereby two complementary patterns of IT usage can be identified: automating and informating (Sanders, 2008). The former focuses on efficiency by automating tasks such as inventory management and the latter provides information to support decision making. Although there are various opinions and theoretical lenses, such as the transaction cost economics (TCE), towards IT and coordination, researchers agree that IT reduces coordination costs and transaction risks (Finnegan & Longaigh, 2002; Malone & Crowston, 1994; Sanders, 2008).
The research of Arshinder et al., (2008) argues that supply chain members coordinate activities by using contracts for the management of risks and relationships. This is primarily focused at inter -firm linkages (i.e. subsidiaries to suppliers) and contains 'formalities' such as quantity, prices, time and quality. This perspective revolves around formal contracts, wherein a document describes an agreement which is perceived and intended to be legally binding (Lyons & Mehta, 1997). A formal contract is likely to contain aspects of incentive alignment, such as the sharing of costs, risks and benefits among the supply chain partners (Simatupang & Sridharan, 2005). Regarding extant 'contract' literature, two main streams are identified; the formal contract perspective and relational governance perspective (Poppo & Zenger, 2002). This is however not discussed in the research of Arshinder et al., (2008) and Cao et al., (2010). Relational governance differs from a formal contract since it creates alignment between partners via social norms such as trust and mutual expectations about behavior (Cao & Lumineau, 2014). The combination of formal contracts and relational governance are present in inter-firm linkages (Cao & Lumineau, 2014), yet it is of special interest to intra-firm linkages of a MNC. Hereby intra-firm linkages, subsidiary to subsidiary, are assumed to rely more on aspects of relational governance since they are part of the same organization; the MNC.
7 The same holds for the relationship between 'information sharing' and ' joint-decision making' wherein decisions need to be aligned, based on information provided by two parties.
As such, all mechanisms are related to each other, either complementary, or as a prerequisite. An example is the research of Yusuf, Gunasekaran, & Abthorpe, (2004) who examined the implementation of an ERP system. The implementation of an IT system is closely relat ed to information sharing, joint-decision making and contracting. When combined and running smoothly, it creates a frictionless operating system, meaning that coordination creates value. On the other hand, failing at one of these mechanisms results in a faulty implementation and this can, eventually, lead to poor performance of the entity and consequently the supply chain (Arshinder et al., 2008). This also holds for all stages of operations, from product development towards production on a daily basis.
Table 1 shows the definitions used throughout this research concerning the four coordination mechanisms previously discussed:
Definitions of coordination mechanisms
Mechanism Definitions for intra-firm coordination mechanisms
Definitions for inter-firm coordination mechanisms Information
sharing
The sharing of information regarding demand, inventory levels, orders, point of sale data etc. in a timely manner whereby the input can support partners with regard to anticipating future events (Arshinder et al., 2008).
The sharing of information regarding demand, inventory levels, orders, point of sale data etc. in a timely manner whereby the input can support partners with regard to anticipating future events (Arshinder et al., 2008).
Joint-decision making
Coherent decision making among the subsidiaries aimed at mitigating future uncertainty to optimise supply chain benefits (Arshinder et al., 2008), creating unity in the MNC to reduce tensions and work together to remain competitive (Mudambi & Navarra, 2004)
Coherent decision making aimed at mitigating future uncertainty to optimise supply chain benefits via options such as Vendor-Managed-Inventory (VMI) and Collaborative Planning, Forecasting and Replenishment (CPFR) (Arshinder et al., 2008).
IT Application of IT to improve intra-organizational coordination via means such as electronic data interchange (EDI), enterprise resource planning (ERP) and many more to rapidly exchange information to optimize SC operations (Arshinder et al., 2008) and to overcome tensions because of the spatially separated subsidiaries (Finnegan & Longaigh, 2002)
Application of IT to improve inter-organizational coordination via means such as advanced planning systems (APS), electronic data interchange (EDI), enterprise resource planning (ERP) and many more to rapidly exchange information to optimize SC operations (Arshinder et al., 2008).
Contracts Intra-firm contracts rely on relational governance. It is the coordination of intra-firm relationships through social norms (Zhou & Xu, 2012) such as trust and shared expectations about the behaviors of each party (Cao & Lumineau, 2014).
Using contracts to better manage buyer-supplier relationships and risks, wherein coordination of the contracts provides incentives to the SC members and reduces inefficiencies (Arshinder et al., 2008).
Intra- & Inter firm
8 Follow the proposition of Arshinder et al. 2008, this research creates a new perspective towards coordination mechanisms by looking at them from a, multi-angle, MNC network perspective. Adding a new perspective, various researchers have depicted the importance of coordinating activities to improve supply chains under uncertainty (Datta & Christopher, 2011; Hohenstein et al., 2015; Wieland & Wallenburg, 2012). Uncertainty comes forward in the appearance of disruptions that are either man-made, observable, or are the result of non-controllable influences such as earthquakes, being non-observable (Wagner & Neshat, 2010). In both occurrences, mitigating risks is done via value creation at organizations in a 'robust' way, meaning that organizations are less susceptible to disruptions. This is of special interest to MNCs, since they face the additional complexity of managing their own network of subsidiaries. Facing this uncertainty and network complexity, the importance of coordination seems eminent yet there is a lack of knowledge on how coordination can lead towards entities and supply chains being robust. Therefore this research links coordination mechanisms towards the pro-active aspect of dealing with risk and uncertainties, leading to a state of 'robustness' (Durach et al., 2015; Wieland & Wallenburg, 2012).
2.3. Robustness
In the field of risk and resilience literature, robustness is seen by various authors as one of the strongest measures in pro-active risk mitigation (Hohenstein et al., 2015; Kleindorfer & Saad, 2005; Tang, 2006; Wieland & Wallenburg, 2012). Kleindorfer & Saad (2005) argue that it is better to engage in pre-emptive risk mitigation, and avoidance of losses, than to deal with the consequences of disruptions. This holds for the well-known phrase that 'prevention is better than cure' (Durach et al., 2015, p. 119). Various researchers have shown and depicted the importance of robustness as a prerequisite to deal with disruptions (Durach et al., 2015; Tang, 2006) and its direct positive influence on business performance (Wieland & Wallenburg, 2012). While var ious researchers to this day made an attempt define robustness there is no consensus on a formal definition (Durach et al., 2015; Klibi, Martel, & Guitouni, 2010; Kouvelis, Dong, Boyabatli, & Li, 2011; Wieland & Wallenburg, 2012) . Analysing existing def initions of robustness in extant robustness and resilience literature allows the identif ication of (main) attributes that are dominantly present. This can be seen in table 2.
Definition of Robustness in literature and focus of research
Attributes present in research
Definition Literature Maintain
functionality
Resistance Pro-active planning ''Robustness is a proactive strategy that can be
defined as the ability of a supply chain to resist change without adapting its initial stable configuration''
Wieland & Wallenburg,
p. 890; 2012
✔
✔
✔
''a robust strategy will enable a firm to m anage regular fluctuations efficiently under norm al circum stances regardless of the occurrence of major disruptions (..) a robust strategy will help a firm to sustain its operations during a m ajor disruption''
T ang,p36;
2006
✔
✔
"The ability of the supply chain to maintain its function despite internal or external disruptions"
Brandon-Jones et al.,
p. 58; 2014
✔
''The ability of a supply chain to resist or avoid change''
Durach et al.,
p. 123; 2015
✔
✔
✔
''The ability of the network to cope with risks (..) Thus, a robust supply network could be interpreted as the ability to resist the risks and recover from the disruption''
Han & Shin,
p. 136; 2015
✔
✔
9 Table 2 shows that the dominant concept of robustness appears to be maintaining functionality during a disruption, which is eminent for an organization to remain competitive (Brandon-Jones et al., 2014). Since maintaining functionality is deemed as the most forthcoming concept in this research, the definition of Brandon-Jones et al., (p. 58; 2014) "The ability of the supply chain to maintain its
function despite internal or external disruptions" is seen as most comprehensive since it includes the
possibility of disruptions coming from inside.
Additionally, it can be derived that that maintaining functionality consists out of pro-active planning for disruptions- and resistance during disruptions. Pro-active planning refers to the ability of an organization or supply chain not to be affected by the disruptions (Durach et al., 2015; Tang, 2006).
Pro-active planning revolves around having predefined contingency-, communication plans
(Hohenstein et al., 2015) and being able to monitor the supply chain in the broadest sense (Durach et al., 2015). It is about having ex-ante measures and hereby redundancy, besides visibility, is one of the most cited concepts to achieve robustness (Durach et al., 2015). Examples of redundant measures are having multiple suppliers, over-capacity, safety stocks and back up suppliers (Sheffi & Rice , 2005; Tang, 2006). Visibility is seen as a key element in robustness since its presence makes it possible to track information and products (Brandon-Jones et al., 2014) and whereby its absence can increase vulnerability to risks (Hohenstein et al., 2015). Visibility and coordination overlap each other whereby both underline the importance of having access to, or timely share information to maintain operations (Jüttner & Maklan, 2011). In extant literature, pro-active planning is widely associated with 'readiness', anticipating and mitigating the impact of disruptions beforehand (Hohenstein et al., 2015).
Resistance follows the ideology that an organization or supply chain affected by disruptions has the
ability to withstand them while undergoing them (Durach et al., 2015; Wieland & Wallenburg, 2012). This requires flexibility which comes in various concepts. Flexibility contains elements such as information sharing, joint-decision making (both also part of visibility), velocity in terms of responsiveness (Wieland & Wallenburg, 2013) and the ability to quickly redesign the supply chain to mitigate the impact of disruptions (Hohenstein et al., 2015). To simplify the matter, this research follows the definition of Kamalahmadi & Mellat-parast (2016, p. 122) wherein flexibility is seen as
''the ability to take different positions to better respond to abnormal situations and rapidly adapt to significant changes in the supply chain''. Having flexibility in areas such as capacity, production
facilities, supply base and labour arrangements can increase robustness (Kamalahmadi & Mellat-parast, 2016; Tang, 2006).
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2.4. Conceptual model
While literature indicated the importance of coordination across supply chains, this research enters a new perspective wherein coordination mechanisms are analysed on a MNC network level. The MNC network is a complex domain wherein cooperation and competition are closely linked to each other. Coordination, based on information sharing, joint-decision making, IT and contracts, is seen as an enabler for increased supply chain performance and the alignment of activities to reduce tensions in the MNC network. Thereby robustness of the network is considered as a desirable state since it refers to the ability to withstand disruptions and continue operating aiming for the best value creation possible ( Brandon-Jones et al., 2014). The aim of this research lies on analyzing how these coordination mechanisms, within the MNC network, can lead to state of robustness. This leads to the following conceptual model that clarifies the network, and linkage towards robustness:
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3.
Methodology
The goal of this research is to gain insight in how intra- and inter-firm coordination in a MNC network can lead to robustness. This is done via a case study methodology. Since this research is novel in the way that it merges MNC-, coordination- and robustness literature domains, a case study provides the opportunity to study the MNC network in its rich, real-life context and gain meaningful insights of the mechanisms at play (Eisenhardt & Graebner, 2007; Voss et al., 2002). The unit of analysis in this research is twofold, a dyadic- inter-firm relationship is analysed and combined with an inter-firm, network level analysis. Hereby the phenomenon at play are the coordination mechanisms, efforts and dimensions of robustness within the MNC network. The exploratory nature of this case study provides the opportunity to gather qualitative empir ical insights by asking why¸ what and how questions to get a relatively full understanding of the complexity and nature of the phenomenon (Voss et al., 2002). The suitability for a case study approach follows the research suggestions of Arshinder et al., (2008) to gain more insight on coordination efforts and following the suggestion of Durach et al., (2015) to further investigate robustness. This is one of the few studies in resilience and robustness literature that takes a dyadic- and network level analys is into account for the depth of analysis. By applying a case study, the MNC context, in its natural setting, provides the opportunity to gain rich data (Yin, 1994). The relevance and application of a case study in this research is underlined by McCutcheon & Meredith (1993, p. 252): ''(..) embracing a field of investigation techniques such as case studies is
bound to make the individual researcher, and the field in general richer and better prepared to solve real operations management problems''.
3.1 Case Selection
As this research applies a dyadic- and network level analysis with regard to the concepts of interest, a single case was chosen. A single case provides the unique opportunity to analyze a MNC network, regarding linkages between subsidiaries at the focal tier, and the upstream suppliers as structures are evolving over time. Thereby the application of a dyadic- and network level analysis suits the aim of this research, looking at linkages and coordinative activities in the MNC network.
12 Since the market was focussed on the Benelux and surrounding, the decision was made to develop- and produce the appliance both in subsidiary A and subsidiary B. During the development of the product subsidiary A was in the lead, during the production phase no subsidiary was in the lead. Two key suppliers were selected to complete the network perspective. In this setting supplier C is a long-term supplier of both and supplier D is a new supplier. In addition to the buyer-supplier linkages, supplier C supplies supplier D with components which create a supplier-supplier linkage in this network. Within this network, both subsidiaries order individually at these suppliers hence the selected entities create an interrelated MNC network. The network described above is formed relatively recently and is therefore interesting to study to see what coordination mechanisms are at play, how and
what orchestrates the supply chain, how robust they are and why the supply chain is designed as it is.
To analyze the MNC network on a dyadic- and network level, the selected entities were approached via phone and follow up contact was conducted via e-mail. In total 5 entities create the MNC network under investigation. A follow up interview was conducted at the headquarter of the MNC to reflect on initial findings.
3.2 Data collection
This research applied the following combination of techniques to derive data from the MNC network:
I. Seven in depth semi-structured interviews, performed at two subsidiaries located in the
Netherlands and Germany. Two suppliers located in the Netherlands and Germany. Additionally, a follow up interview with headquarter of the MNC was conducted after these interviews
II. Input from observations made at subsidiary A in the Netherlands, which was visited for a period of one week, and followed by two visits. Supplemented by a site-visit at supplier C.
III. Analysis of documents, archival research and usage of intra-net at subsidiary in the
Netherlands.
The combination of the above described methods are part of the research protocol which consists of a cover letter and the interview protocol (appendix 1-3). The interview protocol was developed with a second researcher under guidance of a supervisor and based on existing literature. During the site visit at subsidiary A, key informants in this network were selected based on field research at subsidiary A and introduced by both subsidiaries as key suppliers in the network.
Between April 2016 and May 2016 face-to-face semi structured interviews were conducted in the Netherlands at the locations of subsidiary A and supplier C. The interviews with the subsidiary B and supplier D were performed via a video-conference in the same time period. A follow up interview with the headquarter was performed as last and was also done via a video-conference. All interviews were conducted in English and were recorded with a recording device and transcribed as soon as possible to ensure reliability and accurateness (Yin, 2009). The advantage of the semi structured interview s is having flexibility within the interview and the ability to compare answers afterwards (Yin, 2009).
13 At each entity, two people were interviewed holding key positions in relation to the appliance with the exception of entity 3 which held a solo position, see table 3. The interviews were conducted by two researchers and this helped to increase the accuracy of the findings by supplementing each other during the interviews and discussing the findings afterwards. After the interviews, the transcripts were sent to the interviewees to check whether the information aligns with their intended storyline.
The subsequent validation gave the opportunity to confirm what has been said, or repair what is needed to enhance the construct validity of the research (Voss et al., 2002). All transcripts were officially approved by the interviewees via e-mail within one week after the receiving the transcript. By attending subsidiary A for a week, and seeing firsthand how the appliance is build and how the involved departments interact allowed for further verification and clarification of interviewee responses. The same counts for the visit at supplier C, where the interview was followed by a production line tour. These visits gave insight into work environment and systems of the MNC and its suppliers (Voss et al., 2002). Due to the sensitivity of the information provided by the entities, they requested that neither their name nor company's name are published. Therefore the following table only displays non identifiable information of the suppliers.
Entity Organization Department/ position of interviewee(s) Length
1 Subsidiary A MNC Purchasing 99m. 2 Subsidiary A MNC Logistics & Operations 58m.
3 Subsidiary B MNC Value stream 40m. 4 Subsidiary B MNC Purchasing & Logistics 79m. 5 Supplier C Sales & Planning 104m.
6 Supplier D Sales 61m.
7 Headquarter MNC Production director Europe 42m.
Table 3 Inte rvie ws conducte d
The seventh interview with the headquarter of the MNC was initiated to reflect on the findings after all six interviews were conducted. Additional sources of data were used in this research to increase the 'trustworthiness' of the data which could be analyzed. This supplementary data can be seen in table 4.
Data triangulation Description Length Date
Meetings off-record
Meeting 1 with customer logistics planning, introduction to organization
45 m. April 2016 Meeting 2 with manager logistics and material
management
40 m. April 2016 Meeting 3 with manager logistics and material
management
60 m. April 2016 Meeting 4 with material management 30 m. May 2016
Observations
Production line tour appliance 90 m. April 2016
Week presence at Production facility Subsidiary A, working on research
1 week. April 2016
Production line tour supplier C 60 m. May 2016
Documents studied
MNC annual report 2015 x April 2016
MNC corporate contract x April 2016
Organizational charts 2016 x April 2016
Production planning October 2015 x April 2016
Overview components appliance supplied by supplier C & supplier D.
x April 2016
Intra-net browsing x April 2016
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3.3 Data analysis
Data analysis started with open coding and the first step herein was data reduction by selecting useful quotes that have a linkage towards concepts of interest. To keep track of all the data and allow further analysis, a database was made in excel. Thus every interview was coded individually and ordered per perspective (e.g. subsidiary A - supplier C etc.) and this created 12 perspectives. Subsequently, these quotes were further coded, whereby second order concepts emerged and were sorted, such as ''incident communication'' and ''speed of decision making''. This gave a first indication and overview of the coordination mechanisms at play in the MNC network. This enabled the third step wherein these second order quotes were placed under a coordination mechanism, being a third-order concept. After the completion of the third order concepts, the data was analysed in full and linked towards a robustness theme when possible, e.g. ''pro-active planning'' or ''resistance''. Each coding step involved moving gradually towards a more abstract level. Figure 3 reflects this process and an excerpt of the coding tree can be found in table 4.
Figure 3 Data re duction analysis
The first step in analyzing the data was looking at the dyadic relationship of subsidiary A and subsidiary B. This created an understanding of what coordination mechanisms were at play in the MNC and how their relation towards robustness was. Subsequently doing this for each entity, a detailed understanding of relationships, mechanisms and linkages in the MNC network emerged. While this research is somewhat exploratory in nature, there are no pre-defined scales that cover the content of the data. Thus, to create a better understanding of the data and spot differences or alignments, we judged quotes with a grade between one and five wherever possible. Wherein one was 'most negative associated' and five 'most positive associated'. While the analysis mainly consisted of interpreting quotes and finding linkages, grading aided in creating a network perspective. Although it can be argued that this approach has some limitations since grading was done based on heuristics, it allowed for visualization of findings as depicted by figure 4. This shows the intra-MNC linkages to create a better understanding of the coordination mechanisms at play.
In conclusive and as advised by the work of Yin (2009) construct validity was ensured by using data triangulation and multiple resources. To ensure external validity, key informants at subsidiary A were asked to review the draft case study and existing theory formed the foundation of the mechanisms in this research. Reliability of the data was ensured by using semi-structured interview guides and letting the interviewees review the transcript.
Interview data
Data reduction (First order codes)
Descriptive codes (second order
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Data reduction/ theme
Descriptive code(2nd order) Coordination mechanisms (3d order) Robustness theme
''Only when things went wrong then we had several Telco's and coordination or information sharing about suppliers. But there is no
structural-, we don't do it on regular basis.'' (Logistics A)
''Incident driven, there is no structural, mutual approach to, for example supplier development. If there is an incident like now we have with supplier D, then there is coordination and communication but that's it . '' (Sales C)
Incident
communication Information sharing
Resistance
But what X mentioned, we both locations think a bit plant wise. (Purchasing A)
Plant-wise
thinking Pro- active planning ''Also for the forecast, if it was low and it goes
up, then you have to divide. So you know you don’t have enough in both plants, but if you then let it free, then the one who shouts the hardest or the loudest gets parts. (Purchasing A)''
''Yes, and also the problem that you have to keep in mind that maybe the strategy in subsidiary A to produce a boiler is a different one as we do it in subsidiary B (Logistics B)'' No alignment Joint-decision making Resistance Pro- active planning ''there should be like, a standard format saying if
something goes wrong and you're both supplying to the suppliers, this will happen, you will take the lead, or we will take the lead. (…) this is not the case right now (Logistics A)''
Responsibility
''We both have SAP but a different system. (Logistics B)''
''Yes we are running SAP both, to a certain extent, but separate versions. (Logistics A)''
Not aligned interface system
IT
''We have no contract with supplier D. They (subsidiary A) put it in our hands, but it’s not something we wanted. (Sales C)''
Forced relationship
Contracts
Resistance
''Yes, we have a corporate agreement which includes the general things like, warranty, insurance, also the logistic plans, so there’s a framework contract (Purchasing A)''
Formal contract Pro-active planning
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4. Results
The aim of this research is to find out how coordination can lead to supply chain robustness on a MNC network level. As depicted in the theoretical background, the main goal of robustness is to maintain functionality and this is based on two domains of pro-active planning for- and having resistance during a disruption. To help the subsequent discussion on how and why coordination influences robustness, two consecutive sections are created; (1) intra-firm linkages and (2) inter-firm linkages. The first section evaluates the intra-firm linkages of subsidiary A and subsidiary B on a dyadic level. The second section shows the inter-firm linkages of both subsidiaries and the suppliers in a network level analysis. Findings show that intra-firm coordination influences inter-firm coordination and that there is a fifth coordination mechanism at play: responsibility. The results indicate that the supply chain is vulnerable to disruptions and the MNC is not robust.
4.1 The MNC: Dyadic Intra-firm perspective
Between subsidiary A and subsidiary B, information sharing is found to be the most mentioned element of the coordination mechanisms. This is derived from the fact that the intensity of information sharing increased considerably because of a forecast-disruption that occurred. In other words, information sharing between the two subsidiaries occurred on an incident driven basis: ''Only when
things went wrong then we had several Telco's and coordination or information sharing about suppliers. But there is no structural-, we don't do it on regular basis.'' (Logistics subsidiary A). From
subsidiary A point of view, there is a need for information sharing on a structural basis since the long-term goal is to produce the same type of appliances: ''As what I said, if we are producing the same type
of boiler, then it would be ideal for us to have a weekly Telco with them. What are they going to be producing? What are we producing? If there are any issues or things like that.'' Logistics subsidiary A.
From the interviews it is derived that there is no barrier to share information in terms of 'accessibility', there are various methods available to communicate and it is stated that they know how to reach each other and with a fair share of ease. It seemed however, that information sharing between cross- sectional departments or comparable departments differ.In the development phase information sharing was troubled between different departments of both subsidiaries as depicted by subsidiary B:
''(..) With some new parts for example we had problems during the ramp up with the design of some components (..) or the BOM. It was quite time taking, and a lot of effort to always try to get the right people from subsidiary A R&D to solve the problem especially quickly'' Logistics subsidiary B.
This is underlined by: ''We always had to give the problem to subsidiary A and we did not always get
direct feedback on what is the current state of the problem solving. They did not always communicate dates and concrete actions'' Logistics subsidiary B. Despite the difficulties in communicating cross-
departments, the results show that the communication of logistics subsidiary A to logistics subsidiary B is somewhat aligned, as depicted by: ''(..) people that are related to this process they know each
other very well. So there are no barriers to share information or what so ever.'' Logistics subsidiary A
and ''I think the problem was not between logistics, because logistics in my opinion really has the
same understanding.'' Logistics subsidiary B. While the two related departments are aligned,
communication cross-departments is poor.
These differences in accessibility of information sharing between various departments reflects back to the observations that there is a lack of structure in information sharing and handling, caused by uncertainty of not knowing who to reach and who is responsible for what. Additionally, information sharing is related to the complexity subsidiaries are facing. They are operate within the same MNC as subsidiaries, yet there are signs of competition amongst them: ''In terms we are competitors as well, so
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''So you have some different goals and then maybe you have hidden agendas sometimes.'' Purchasing subsidiary A.
The aforementioned quotes are underlined by the other interviews on intra-firm level that there is distortion of information sharing and 'subsidiary-wise thinking' as a result of unclear strategies and goals. Although both subsidiaries have their differences they both underline the importance of having plant visits more often, having face to face contact, discussing issues and learning from each other. Yet, this is not happening on a frequent basis. The perspectives of subsidiary A and subsidiary B regarding information sharing are somewhat aligned, yet both underperforming.
Regarding the second coordination mechanism, there is a low presence of joint-decision making and this has its roots in the aforementioned issues of plant-wise thinking and competition amongst them. From the interviews and observations it was denoted that from the beginning of the development phase, there was hardly any joint-decision making: ''They (subsidiary B) took the decision to do
business with these kind of suppliers and then we just receive the products from the suppliers they select. This could be improved for the future. If you know that it’s also for subsidiary A, then you should also align up front.'' Purchasing subsidiary A. Once the appliance entered the serial production
phase, the lack of joint-decision making is highlighted by the remark of the logistics manager of subsidiary A: ''(..) there was a lot of information sharing between the subsidiaries, on all kind of levels
with suppliers, but it was not very well coordinated. (..) Basically what we did was actually to keep the planning as high as possible to make sure that we get parts.''.
In contrast of making joint decisions and aligning operations, these actions created an environment of competition within the MNC. This is depicted by the logistics manager subsidiary B: ''In my opinion
it is really in this case, both subsidiaries have different goals. This was really a big challenge for the logistics. This could be really improved if there is one given common goal or strategy or standard.'' Logistics subsidiary B. From the data a relationship can be seen between the lack of information
sharing and the lack of joint-decision making, which follows the reasoning that information sharing is required for making joint decisions, yet this is not happening on a structural basis: ''Information
sharing is incident driven, there is no structural or mutual approach to, for example, supplier development. If there is an incident like now we have with supplier D, then there is coordination and communication but that's it.'' Operations subsidiary A.
Although this research beforehand identified four mechanisms of coordination, the results show that there is a fifth mechanism at play: Responsibility. Within this case subsidiary A was assigned as leading subsidiary in the development of the appliance project, yet the actual development was divided upon the two subsidiaries. This caused initial problems with responsibility: ''Heat set and HMI are
done by subsidiary B, and appliance is done by subsidiary A. They were not 100% aligned. (..) The problem then is; parts are not released. They are not known and released in the system, so nobody feels responsibility here in the subsidiary A.'' Purchasing subsidiary A.
Following the development phase and having the appliance ready for production, there was no clarity about responsibility and 'problem ownership'. It appears that there was no (hierarchical) structure in place, both subsidiaries were now producing the appliance without alignment: ''There was nobody
18 The uncertainty about responsibility and problem ownership is reflected from the perspective of subsidiary B, wherein they imply that after the development phase subsidiary A should have held responsibility: ''The sites, which are development wise, or technically wise in the lead was in this case
subsidiary A. They should take much more responsibility on the other producing sites.'' Logistics subsidiary B. From the interviews and observations it shows that the lack of responsibility is a
reoccurring aspect that influenced the other coordination mechanisms, mostly having an inf luence on information sharing and joint-decision making.
Regarding IT, the data shows that subsidiary A and subsidiary B operate with a different IT landscape. They both have an ERP-SAP system, but different versions. These versions are not aligned and this resulted in confusion and information distortion because of planning that occurred manually, outside the system. In the beginning of the project, information was shared via Excel which proved to be unreliable to both the subsidiaries as well as to the suppliers: ''I remember we sometimes had three
different versions of excels regarding the quantities for example, or regarding the structure of the bill of materials and the new parts. There was quite some confusion at several times because we did not have the same exact files but similar files with different update versions.'' Logistics subsidiary B.
There is a slight difference in perspective towards each other's IT capabilities and that is because subsidiary B applies more sophisticated IT tools, such as a VMI- (vendor managed inventory) tool. Next to that both subsidiaries share the perspective that having aligned IT systems, through EDI, would help to improve the current situation: ''My vision on it would be that we would work with the
same SAP system'' Logistics subsidiary B. The lack of a common IT platform between subsidiary A
and subsidiary B shows interrelatedness with aforementioned aspects of information sharing and joint-decision making. Herein IT could be seen as an enabler for information sharing (i.e. forecasts, disruptions, supplier evaluations) and joint-decision making.
Regarding the fourth mechanism, contracts, results show that this is the least mentioned mechanism yet having the most positive context. This has two perspectives, the first is less dominant and shows that there are some formal contracts regarding mostly the allocation of costs. These formal contracts do not provide structures for coordination in terms of information sharing, joint-decision making or responsibility. The second is more dominant and reflects upon the relational governance aspects between the two subsidiaries. The interaction between the subsidiaries is denoted as positive based on aspects such as social norms, trust and shared expectations. This is mentioned by the logistics manager of subsidiary B: ''(..) everybody has the same understanding, the same problems, we are sitting in the
same boat.''. This is confirmed by the perspective of the project purchaser at subsidiary A: ''I think that both subsidiary B and subsidiary A, but all other subsidiaries as well, we know we are in the same boat. So we are all in the MNC boat''. While the previous mechanisms showed interrelatedness, it is
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Dyadic intra-firm analysis
By analyzing the five coordination mechanisms and showing the perspectives of both subsidiary A and subsidiary B we could map-out this part of the network. Regarding intra-MNC level, four coordination mechanisms score low with the exception of the contracts mechanism, as can be seen in figure 4. While there seems willingness from both subsidiaries to improve, the self-induced forecast disruption in combination with indistinctness about responsibility, strategies and goals of each subsidiary lead to low scores and (slight) differences between them. Uncertainty about the strategy and goals are reflected by the headquarter of the MNC: ''(Answering competition question) I don't understand how
that should have happened. We are MNC X, we are not subsidiary A and we are not subsidiary B towards a supplier. We should be MNC X.'' Basically subsidiary A and subsidiary B are aligned
concerning their perspectives towards each other and both are aware that they are underperforming with respect to coordination. The only difference is in IT, and this is due to the more advanced state of IT at subsidiary B. The MNC's initial goal to build modular and thereby decreasing complexity had a counter wise effect whereby complexity increased, resulting in underperforming intra-firm coordination.
Figure 4 Intra-MNC analysis
Intra-MNC Robustness
As depicted in the theoretical background, being robust is about maintaining functionality based on (i) pro-active planning and (ii) resistance. The pro-active planning domain relies on having pre-defined contingency and/ or communication plans. Following this perspective, the data shows there was a lack of structure and responsibilities throughout development- and this continued during the production phase: ''(..) we were both not in the lead, so sometimes we both knew that we were doing something
stupid but still did it.'. Logistics subsidiary A. This resulted in a situation wherein 'problem-ownership'
was not clearly established and nobody was in the lead of operations. As derived from the previous section, subsidiary A was not involved in the supplier selection and during the production phase there was no mutual planning: ''There is no mutual planning saying 'you need a little bit more stock because
you have space''' Logistics subsidiary A. Furthermore the data shows that during development and
production the IT systems were not aligned.
Information sharing Joint decision making Responsibility IT Contracts
Perspectives of subsidiaries
subsidiary A to subsidiary B subsidiary B to subsidiary A20 The aforementioned lack of pro-active planning can be a result of the 'time-to-market pressure'. The headquarter of the MNC forced a time-to-market deadline as depicted by Purchasing of subsidiary A: ''We kind of rushed things to organize the ordering of all parts. We did it because we had a lack of
capacity, but by doing that we again created additional work, not only at logistics but also here at purchasing and at engineering. We threw up a lot of additional work because we did not follow our systematic. So, we had double capacity loss''.
The influence of the time-to-market pressure is depicted by the following: ''If you want to make a
triple A product, you need three times more time. You can't force engineering to develop something new in a way that they copy another part. (..). There are always possibilities and we did, but we had to skip a lot of other things.'' The skipping of 'a lot of things' created a linkage towards: ''We were already scheduling production, while we did not have the final design of the parts which are used.''
and ''We have plenty of concessions, which means that products were not released but we just need
them, we have to produce something, it’s a must from the management.'' Purchasing subsidiary A.
This shows that the MNC deliberately took r isks in order to achieve the time-to-market deadline which resulted in manual planning- and material handling actions, 'work-arounds' and losing the possibility to get stock under control. The actions that followed the time-to-market pressure indicate limited up-front alignment between the subsidiaries and headquarter, a sign of poor pro-active planning.
Following pro-active planning, resistance reflects to a state wherein an organization is resistant to disruptions, e.g. dealing with disruptions while undergoing them. Herein a linkage can be seen towards resistance since a forecast disruption occurred. The non-alignment in the pro-active planning phase resulted in differences and complexities in the modular design of the appliance:
''My impression is really, and that is now confirmed, that instead of decreasing the complexity we increased the complexity with the appliance.'' Logistics subsidiary B and ''What we have now is that everybody is still inventing the wheel once again (..) I think the original target of the appliance was different. We did not achieve it so far because we did not use consequently a standard because there was no kind of strong central coordination for this modules, or for these developments, enforcing a standard.'' Logistics subsidiary B. This shows that during the disruption the subsidiaries continued to
'resolve' the disruption without alignment. On the other hand, as can be seen in the joint-decision making section, the data showed that while the disruption occurred, communication efforts increased between the subsidiaries. During the recovery phase of the forecast disruption, both subsidiaries acknowledge that no learning effect occurred: ''(..) if the suppliers burn down, it would mean that we
would stop production. (..)(answering to learning effect of disruption) I can envision this happening again'' Logistics subsidiary A. This indicates that while a forecast disruption occurred, no actions
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4.2 The MNC and its suppliers: inter-firm coordination
The second part of this single case study complements the findings on the intra-MNC perspective by identifying critical aspects concerning coordination in producing the appliance between the MNC and its first tier upstream suppliers. As explained in the methodology, the observational unit in this section is the whole network. Hereby the network drawing of figure 5 helps in describing the physical flow of goods, and the flow of information to- and between the entities. Since the network level analys is accounts for 12 perspectives, this section discusses the main events of intra- and inter-firm coordination. The lines depicted by red or green respectively indicate either a troublesome or acceptable linkage, with the exception of subsidiary A and subsidiary B since this has been discussed in the previous section.
While it was previously mentioned that there was uncertainty about responsibility between subsidiary A and subsidiary B, this is underlined by both suppliers: ''So for us it was a little bit difficult because it
was not very clear who is the main partner was for us. Also the coordination in between subsidiary A and subsidiary B, it looks like they are not speaking much together.'' Sales supplier D and ''For us it was that subsidiary A was working in front, but afterwards we must also go to visit subsidiary B, and they ask us questions which they must have asked their colleagues, and not us as supplier.'' Sales supplier C. This shows that while subsidiary A was assigned as leading subsidiary during
development, there was no clarity about the structure and responsibilities during the production phase. The inefficiency of coordination between subsidiary A and subsidiary B reflected upon the suppliers, causing uncertainty in the network: ''I think one of the main problems is actually the communication
between subsidiary B and subsidiary A. This is because subsidiary A is giving us orders and subsidiary B is not informed about that. I'm not aware how independent the two subsidiaries are operating.'' and ''It appears to me that the subsidiaries also don't know who is responsible.'' Sales supplier D.
22 The findings show that responsibility inf luenced information sharing throughout the network. During production it was unclear who was in the lead, this created a situation where both subsidiaries ordered their materials without coordination towards the suppliers. In turn, the suppliers faced the difficulty of having to deal with two requests coming from two entities of the same MNC: ''At some point in time
our capacity was 800 units and we said 'we don't care about which parts is going to whom, but we have a maximum of 800'. But they never adjusted their planning, so they came over 800 and then we had a problem who to deliver to.'' Sales supplier C.
This is underlined by Supplier D, having difficulties with the allocation of products: ''Actually we have
the production capacity of about 500 systems per week. Therefore the deliveries are often clashing between subsidiary A and subsidiary B. This problem is well known in the MNC, but actually we didn't find the solution therefore.'' Sales supplier D. An interesting finding is that information sharing is
further troubled in this network because of the 'non-alignment' in the development phase. Supplier D was selected by subsidiary B, without aligning that decision with subsidiary A. The result is troublesome coordination between supplier D and subsidiary A, underlined by Operations of subsidiary A: ''With supplier D communication and mutual understanding of processes is not in place.
Therefore supplier D is much more of “black box”: we do not know what is done with the input we give it and are not certain the output is as expected.'' and ''For us it's very difficult. It's very difficult to get a hold of people there. (..) I'm sensing they don't want to communicate with us. They prefer communication with one guy in subsidiary B.''. It is thereby interesting to see that supplier D already
opted for their own solution in this matter: ''Yes so far they (subsidiary A) are ordering directly at our
facility. But our wish is that everything should be coordinated via subsidiary B. So that we have a single point of contact. We are trying to force that for the period now.'' Sales supplier D. Besides these
information sharing difficulties, a forced relationship was created by the MNC between supplier C and supplier D, whereby the former has to deliver a complex part towards the latter.
This forced relationship is characterized by difficulties in information sharing and joint-decision
making: ''They have given us supplier D because they couldn't get it right with them, and we have the same problem, because they don't listen at all to the information we are giving them.'' and ''supplier D is a big problem in this complete appliance network and in the supply chain for us.'', characterized by: ''this (transport) crate is now given free after two years, for 1 week ago. So it has taken more than half a year to take a decision to make a transport crate upon which everybody agrees. '' Sales supplier C.
This is underlined by the perspective of supplier D that they would rather have worked with their own preferred supplier. The data shows that a lack of transparency on the coordination structure caused even further problems, an example of this is supplier D, which stated that it has no access towards a
contract between subsidiary A and supplier C, concerning the quality (e.g. specifications) of the
products they send to them: ''There is something like a contract in between supplier C and subsidiary
