Strategic Types and Competences of Domestic and Foreign Plants: An Empirical Study

Abstract

A very important decision for multinational companies’ managers concerns what activities, phases and competences should be located in the home country and what could instead be offshored. Our study seeks to support them in this choice by answering to the following questions: (a) should the specializations assigned to foreign plants be different from those of domestic plants? (b) should key competences be held only in the domestic manufacturing base or also in the offshore one? We collect and analyze a wide set of data of an international research project, concerning competences and manufacturing practices of 236 MNC plants located in nine countries. We identify through cluster analysis different group profiles within domestic and foreign subsamples and compare the corresponding ones. We then compare domestic and foreign plants in a set of competences and manufacturing practices. Our empirical findings show that (a) the specializations (strategic types) of domestic and foreign plants can be substantially the same and (b) offshore plants rather than domestic ones tend in general to hold the most advanced competences.