Multinational Firms and the Management of Global Networks: Insights from Global Value Chain Studies

Valentina De Marchi, Eleonora Di Maria, Stefano Ponte

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    Abstract

    This paper aims at enriching the literature on international business (IB) studies to include insights from Global Value Chain (GVC) analysis to better explain how MNCs can orchestrate a global network organization. A first important contribution of the GVC literature is that it shifts the focus from single firms to their value chains, providing instruments to study how activities are split and organized among different firms at the industry level, and how MNCs can implement different governing mechanisms within a network-based setting. The GVC literature also highlights that retailers (as global buyers) often act as ‘lead firms’ in shaping the trajectories of global industries, while IB studies have so far focused predominantly on manufacturing firms. A fine-grained analysis of alternative forms of governance characterizing value chains can offer additional elements in explaining how MNCs can manage their network relationships in a global scenario. Finally, through their focus on upgrading, GVC studies suggest that knowledge flows and innovation dynamics taking place within value chains are as important as those taking place within the MNC’s organizational border. We conclude by arguing that these insights can help the IB literature to examine the challenges and opportunities MNCs face in engaging with suppliers and to explain the dynamic evolution of orchestrating global activities at the global level.
    Original languageEnglish
    Title of host publicationOrchestration of the Global Network Organization
    EditorsTorben Pedersen, Markus Venzin, Timothy M. Devinney, Laszlo Tihanyi
    Place of PublicationBingley
    PublisherEmerald Group Publishing
    Publication date2014
    Pages463-486
    ISBN (Print)9781783509539
    ISBN (Electronic)9781783509546
    DOIs
    Publication statusPublished - 2014
    SeriesAdvances in International Management
    Volume27
    ISSN1571-5027

    Cite this

    De Marchi, V., Maria, E. D., & Ponte, S. (2014). Multinational Firms and the Management of Global Networks: Insights from Global Value Chain Studies. In T. Pedersen, M. Venzin, T. M. Devinney, & L. Tihanyi (Eds.), Orchestration of the Global Network Organization (pp. 463-486). Emerald Group Publishing. Advances in International Management, Vol.. 27 https://doi.org/10.1108/S1571-502720140000027009