Information Technology in Multinational Corporations

The power ‘tussle’ between headquarters and subsidiaries and headquarters’ power recentralisation have recently emerged and are increasingly debated issues. This study explores the key characteristics and role of information technology (ERP systems in particular) as a driving force in facilitating headquarters’ power recentralisation over subsidiaries, and its impact on subsidiary local performance. Fairly tentative literature suggests evidence of key characteristics of ERP systems in MNEs but due to a lack, more exploratory studies and empirical data is needed for a better understanding. Limited literature also suggests evidence of the importance of information technology in driving headquarters’ power recentralisation. However, there is still no comprehensive and valid understanding of this phenomenon and this research is still at an early stage. Another stream of literature suggests that ERP-driven power recentralisation can have undesired consequences on subsidiary local performance. Again, empirical evidence of these suggestions remains very limited. This study is an attempt to deal with these important gaps in current international business research.