University of Twente Student Theses
Centers of excellence in multinational enterprises : expert insights and a qualitative case study
Klocke, Luisa (2024) Centers of excellence in multinational enterprises : expert insights and a qualitative case study.
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| Abstract: | During the current time of globalization and rising economy, gradually more companies evolve into multinational enterprises. While the expanding influence of market dynamics means supremacy and growth, it also confronts firms with issues that need to be managed and solved globally. Not all corporations are able to tackle this anticipated transformation. McKinsey, one of the big three global consulting firms, promote their change management service by citing that 70% of all change initiatives in global corporations fail (Ewenstein et al., 2015). While the exact rate is uncertain, it is crucial to understand the challenges and success factors that companies must address to avoid falling into the high failure rate category. Therefore, effective change management requires a focus on key areas: purpose, principles, processes, people and performance (Pryor et al., 2007). A primary challenge firms encounter is the need for uniform processes to ensure consistency and increase efficiency across their diverse operations (Doval, 2016). One solution to this demand is standardization. Standardization is defined as a sequence of procedures that aim to raise the norms and standards of a company, most often concerning technical measures (Li et al., 2024). Companies that aim to evolve quickly, expect to introduce best practices to all subsidiaries across different nations, submerging into a big, coherent corporation that uses uniform practices. An essential advantage during this process is scalability: Through standard processes, scalability facilitates companies to scale their operations and expand into new markets without compromising on quality or efficiency. Among consistency and efficiency, the by-products of standardization are cost reduction (Schreiber et al., 2010), innovation facilitation (Fang et al., 2016), improved risk management (Olechowski et al., 2016), and increased competitiveness (Xu et al., 2020). However, implementing standardization presents challenges that can adversely impact corporation's ecosystems and lead to internal uncertainty (Rebelo et al., 2015; Toh & Pyun, 2023). To provide leadership during such a demanding phase, companies often establish a socalled Center of Excellence (COE). A COE is a sub-formation inside companies that drives transformation and is tasked with supplying leadership for change, assisting the corporation in aligning new adaptions through strategic planning, and offering resources to administer (Mattalah, 2023). The team that is tasked with the responsibility of forming the COE, has to be highly skilled since the establishment depends on their success Additionally, this formation is mostly constructed at foreign owned subsidiaries in order to manage multifaceted global change (Frost et al., 2002). Scientific research about particular COE challenges and success factors is not common, mainly because of the difficulty to access multinational corporations and their sensitive data. Further, companies do not necessary share that they own a COE to external stakeholders which are not involved or the public. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 05 communication studies |
| Programme: | Communication Science BSc (56615) |
| Link to this item: | https://purl.utwente.nl/essays/104042 |
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