Towards the Digitally-Enabled Multinational Inner Network (DEMIN)

Abstract: The purpose of this paper is to contribute to the advancement of International Operations Management in the digital era. Theories and models that address how multinationals organize international operations were generated in the 1990s, a time when Kasra Ferdows wrote his HBR’s seminal article “Making the Most of Foreign Factories”. Despite the critiques, that simple and insightful model, a fruit of Ferdows’ experience, remains as paradigm but must now be updated to become aligned to the features of the digital world. In this theory-building paper, we disclose how Digital Transformation will change the location, coordination, and role of the organizational units that constitute the multinational’s inner international network (IIN). We first synthesize the digital trends into three statements that are contrasted with the assumptions of Ferdows’ model, leading to a new taxonomy. We then display pieces of evidence collected from the recent literature in different management fields. This article brings new perspectives for the understanding of how multinationals reorganize their operations, now and in the future, in times of deglobalization accelerated by pandemics.