The Evolution of Multinational Computer Services Affiliates in Ireland

1. The Evolution of Multinational Computer Services Affiliates in Ireland Konstanze Höchtberger konstanze.hoechtberger@nuigalway.ie Dr. Mark C. White Dr. Seamus Grimes seamus.grimes@nuigalway.ie Paper available at: http://www.nuigalway.ie/cisc/papers/0013ciscwp.pdf CISC Seminar

2. Organisation of the paper • Research framework for the affiliate evolution process • Choice of the case studies: three Irish-based IT services affiliates • The Key Findings – what factors drive affiliate evolution in Ireland? • Future research CISC Seminar

3. Research Framework Industry Context: • Wintelist form of competition • Coupling of business services and manufacturing Corporate Context: • Heterarchy in organisation and intracorporate competition • Bounded rationality Affiliate context: • Performance and managerial attitude • Interpersonal corporate relationships Host economy context: • Technology embeddedness • Stakeholder intervention CISC Seminar

4. The overseas ICT sector in Ireland • FDI-induced economic boom of the 1990s led to near full employment • Economic policies now prioritising higher quality FDI projects and focusing on repeat investments • Emphasis on higher value activities like software development and R&D • Increased involvement of overseas ICT firms in IT services as a by-product of wider shifts in corporate strategy CISC Seminar

5. Top IT services firms in Ireland CISC Seminar

6. Choice of Case Studies CISC Seminar

7. Key Findings I Industry Context • Hardware manufacturing gives way to more diversified, global services operations (e.g. IBM) • Transformation of multinational IT sector in Ireland accelerated by M&A activity (e.g. Digital – Compaq – HP) CISC Seminar

8. Key Findings II Corporate Context • Complex, multidivisional structures retrievable in Irish affiliates (e.g. IBM) • Multitude of corporate and customer linkages connect affiliates to the GPNs • Significant degree of decision-making autonomy with hierarchical control not loosing in importance (e.g. EDS) CISC Seminar

9. Key Findings III Affiliate Context • Occurrence of subversive affiliate strategies (e.g. Digital) • Cultural interconnectivity aids managers’ contact networks with HQ management (e.g. IBM) • Affiliate performance & reputation decisive at any stage of development (e.g. EDS) CISC Seminar

10. Key Findings IV Host Economy Context • Agglomeration economies arising from a highly skilled pool of labour and the presence of the key competitor firms • Network externalities of less importance • Pro-business attitude of the Irish government supports affiliate development • University collaborations play key role in the shift towards knowledge-intensive activities (e.g. HP-DERI; IBM-Centre for Advanced Studies) CISC Seminar

11. Future Research • More empirical evidence needed on the individual trajectories of foreign affiliates • Paying attention to the various influences on the global, organisational and local level • A case study based, affiliate focused perspective shows most promising for research on GPN and regional futures CISC Seminar