Communications between Manufacturing Units of Multinational Corporations

Abstract

Purpose – We aim to better understand the factors that shape the intensity and perceived effectiveness of communication between heads of the manufacturing units of multinational corporations (MNCs).

Design/Methodology/Approach – A series of interviews and a medium-size survey among subsidiary executives were conducted.

Findings – The intensity of most inter-unit communication channels depends on the speed and magnitude of the changes in products and production technologies that manufacturing subsidiaries experience. For newly established subsidiaries, mastering inter-unit communication channels precedes inter-unit cooperation. At the same time, different types of inter-unit cooperation strengthen specific channels of inter-unit communication. The assessment of the efficiency of a communication channel with high media richness strongly correlates to the intensity of its use.

Research Limitations/Implications – The results are confined to one country where the manufacturing subsidiaries of MNCs were surveyed. Further research is needed for the general applicability of these findings to subsidiaries in several countries or regions.

Practical Implications – As inter-unit communication precedes inter-unit cooperation for newly established subsidiaries, headquarters and more experienced subsidiaries should promote the use of communication channels with high media richness. Several suggestions on how to perform such a task are proposed.

Originality/Value – This paper contributes to the ongoing discussion concerning inter-unit communication and knowledge transfer within MNCs.

Keywords: Internal communications, Subsidiaries, Multinational Corporations, Manufacturing

JEL Classification: F23, L23