The Practice of Distributed Development - New Transnational Configurations and Managerial Challenges: Perspective from a Danish MNE

 

This paper deals with the current transition from offshoring of simple activities destined for home base competency and capability exploitation, to offshoring of increasingly complex tasks beyond home base competencies and capabilities. A case study of a Danish MNE in the process of redistributing development activities illustrates how an industrial company has coped with the configuration of development oriented activities in a context of global operations and sales. The historical trajectory of the development activities helps to understand how and why new roles and competencies are relocated across the firm. We illustrate how the network of development oriented activities has evolved from a single center driving development to a globally distributed network made of complementary competence centers with reciprocal interdependence, and how this shift has challenged the system and its underlying managerial mechanisms. We conclude that these networks are likely to move through a number of maturity based phases, which place restrictions on the upgrade of absorptive capacity at the individual site level, as well as on the  configurational capabilities related to the structuring, integration and coordination of distributed activities. On this basis, current and future challenges related to the structure and infrastructure of operations network are identified.