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This chapter focuses on the management of information system (IS) outsourcing in the digital transformation era, by focusing on the IS provider as an essential third party in the firm’s business relationships. The chapter proposes an analytical framework to analyse the IS provider in the context of business, by considering the situation as a business relationship triad, and suggests a new perspective on the challenges related to strategic decisions about IS outsourcing. The proposed framework relates the degree of internal cohesiveness of the triad to whether it acts as an entity, in order to outline four triad types, each imposing different managerial challenges for IS outsourcing. Managing IS outsourcing through a business-relationship triad lens allows the firm’s IS strategy and IS outsourcing decisions to be more contextually situated and, hence, better adapted.

Purpose

While much existing research on multinational corporation (MNC) digital transformation has followed a linear design and implementation logic using cross-sectional data, the multiple and divergent needs of headquarters (HQ) and subsidiaries suggest that MNC digital transformation actually involves a more iterative journey. The purpose of this paper is to apply the theoretical perspective of embeddedness to better define the complexities of MNC digital transformation, and identify how HQ and subsidiaries can navigate the complexities.

Design/methodology/approach

This paper presents a longitudinal multi-case study of five Forbes Global 2000 firms that are HQ in Europe with large subsidiaries in the USA. The authors conducted in-depth interviews with 26 senior executives at HQ and subsidiaries over a 15-month period.

Findings

The process of digital transformation is significantly influenced by internal embeddedness (relationship of HQ with subsidiaries and across subsidiaries) and external embeddedness (relationship of subsidiaries with their local markets), and also by strategy, financial and technology considerations. While HQ and subsidiaries have different perspectives, an understanding of these influences can help HQ and subsidiaries navigate digital transformation.

Research limitations/implications

HQ and subsidiaries can apply insights from this research to navigate the complexities of digital transformation.

Originality/value

This paper demonstrates that embeddedness is a useful theory to understand the complexities of MNC digital transformation.

Extending the business network approach involves the researcher’s reconsideration on what assumptions should be employed when determining what is within the boundaries of the network and what is left outside. Extending also implies that something ‘new’ is presented to the business network. What is considered ‘new’ though depends on what is recognised as established within a research field. This means that ‘new’ is not necessarily novel per se, but represents a ‘new’ direction in extending the business network approach. ‘New’ in that sense is something that provokes the researcher to challenge the assumptions on boundary-setting in the business network approach, and consequently offers alternatives supported by empirical studies or conceptual reasoning. ‘New’ can involve embarking into previously unchartered territories where the business network approach allows for alternative explanations. ‘New’ can also be what the rapid technological development brings, and where the business network approach provides deeper insight into the consequences. Furthermore, ‘new’ can be altered terms for firms and markets where research following the business network approach offers complementary views on business effects.

One crucial, recurring challenge for business managers involves taking the right action when pressured to change from resource investment in a business relationship to the pausing or termination of such, which, in some situations may dissolve the relationship completely. In that ongoing quest, a substantial part of the information necessary for the managers’ choice of path of action stems from the past, current and potential future in the specific business relationship. However, to rely solely on the available information in the relationship is, in most situations, insufficient to select appropriate managerial action. The notion that business relationships are better understood as part of business networks is well established (see, e.g., Ford et al. 2002; Håkansson and Snehota 1995), consequently suggesting that further information, potentially vital for the choice of managerial action, can be sourced within the immediate surrounding business network.

In this paper, the consequences of decisions by the EU on SMEs' business performance are analysed. The business network approach is employed to study how the coercive or supportive behaviour of political organisations directly and indirectly affect SMEs' business performance. The result highlights that the direct effect refers to the immediate interaction between the political and business units, whereas the indirect concerns the outcome of political units on other business firms that SMEs have relationships with. To test the assumed direct and indirect effect on business performance, four hypotheses are formulated and tested with PLS using data from a quantitative survey involving 134 SMEs in Sweden and the EU. The paper emphasises the importance of a firm's business relationships as being affected by coercive actions of political organisations, as well as receiving the full benefit from those actions of a supportive nature.

Contributing pioneering new research, this innovative book proposes new ways and directions in which to extend the influential ‘business networks perspective’ approach to doing business. While previous research has focused upon relationships with customers and suppliers, the authors argue that there is a need to expand the outlook to include other stakeholders. Taking a stand in a broad management perspective, chapters relate contemporary issues within industrial and international marketing, product innovation, and information systems. Challenging existing views and proposing elaborate alternatives; this volume examines a range of examples that have inspired researchers to extend the business network. To provide further understanding, Extending the Business Network Approach relates current and new research to territories, technologies and terms to reveal novel insights, and to encourage further directions for research.

Firms have become highly dependent on their use of information systems for daily business activities (Nakata et al. 2010). To function efficiently and provide necessary support to the firm’s business, the management of a multitude of information systems involves continuous technical updates, as well as feature additions, adapting the system to the firm’s different business situations (Brady et al. 2008; Ekman 2015; Ekman et al. 2015). Information systems generally become more standardised, yet the high expertise knowledge needed for maintenance and development of them entails that suppliers of information systems are increasingly specialised on particular systems. Furthermore, the growing number of specialised information systems, and the increasing use in business, make their operational management time-consuming, requiring high degrees of specialised knowledge. As a consequence, firms chose to move the management of information systems to external parties providing the systems (IS-providers). This phenomenon has been described as information system outsourcing, with research on the topic mainly placing attention to the strategic process of management decisions on when to outsource and to whom (Lacity and Hirschheim 2012; Rivard and Aubert 2015). Outsourcing effectively means that the firm, not only for internal needs, but also for their ongoing business undertakings in marketing, sales and purchasing, relies heavily on IS-providers for business performance (Heckman 1999). Due to increasing numbers of information systems and information system providers (IS-providers), firms can no longer rely on one single IS-provider but nowadays have a complex arrangement involving multiple IS-providers for the diverse information systems utilised in business (Gallivan and Oh 1999).

The aim of this paper is to enhance our knowledge on how executive expectation affect the firm’s internationalisation process, namely, by offering explanations to sudden major investments/ divestments that deviate the process from commonly presumed incrementality. The theoretical view developed in this study is founded upon Johanson and Vahlne’s (1977) internationalisation process model and complemented with the concept of executive expectation. Through a longitudinal comparative case study, enriched with archival data and interviews, this paper emphasises the dynamics of the firm’s internationalisation process. This aids to provide some answers on how changes in the composition of executives, such as the replacement of key personnel, can drive the firm’s internationalisation process into a different path when succeeding executives do not share similar expectations to their predecessors.

The last decades’ of international banking deregulations has spurred Swedish banks to extensive foreign expansion, spreading the scope of their organizations to cover several markets. The different markets where Swedish banks’ currently compete are all characterized by varying conditions for banking operations. The center of attention in this paper is on how regulatory environment have affected bank executives’ strategy formation in the internationalization process. A conceptual model based on the Uppsala internationalization process model is developed to analyze the banks’ internationalization in a long time perspective. One crucial finding is that the strategy formation process must be market specific and the hazards of applying general market knowledge.

‘Tic-Toc-Tic-Toc’… a long time has passed for the business network approach. The main aim of this chapter is to discuss the history of boundary extension in business networks, starting in the old times and ending in the new times. Many researchers believe in the existence of the ‘business network’ to some degree. This chapter takes the perception of the business network as a point of departure, working from the perspective that its boundary depends on the intention of the observer. This perspective allows us to present a developmental journey of how the business network approach, over time and in different tempos, has gained its identity, whilst both implicitly and explicitly extended its boundary.