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How automotive companies successfully coordinate their activities across borders

2011

This study focuses on the coordination of international development, production and marketing activities – core functions in which automotive managers have repeatedly identified room for improvement.

Many automotive companies have expanded beyond the borders of their home markets. Some, however, have paid too little attention to coordinating the resultant decentralized activities; and that is the reason why today's automotive managers acknowledge a significant need for action in this regard.

The present study, which comprises 95 automotive companies, investigates how firms successfully coordinate their activities across borders.

Six coordination mechanisms were studied: (1) centralization/decentralization of decision-making; (2) direct personal supervision; (3) bureaucratic coordination; (4) output coordination; (5) socialization and networks; and (6) informal communication.

In view of the findings of our study, we especially advocate the greater use of socialization and networks to successfully coordinate cross-border activities in the automotive industry. Suppliers and manufacturers should focus on establishing a corporate culture that connects the various units of a company, and on promoting networks to foster nonhierarchic information sharing between them.

Since not all companies are yet taking advantage of these mechanisms, the study closes with a presentation of several tools and actions that are appropriate to strengthen coordination by leveraging socialization and networks.

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