Th e Formation of Organisational Competences in the International Telecommunications Production Network

Abstract

Competence building and management has been an issue frequently addressed in the literature, but it seldom has been referred to enterprises acting as part of production networks. The literature is still scarcer when the networks are international and include organisational units located in countries classifi ed as “emerging economies”. The main purpose of this study is to develop an analytical framework for the understanding of the
confi guration of organisational competences in the distinct participants of international production networks: multinationals and their subsidiaries organising local production networks. Different types of subsidiaries create local relationships whenever they act as part of a supply network to serve the local markets (interfi rm relationship). At the same time, every subsidiary keeps an internal relationship with its parent company
and respective headquarters (intrafi rm). This article focuses on the global networks of Telecommunications industry and more specifi cally in Brazil. The networks are essentially
constituted by Telecom Operators and Specialised Equipment Suppliers. The fi eld research was done in a sample of six subsidiaries operating in Brazil. In every fi rm we studied the
way in which competences were built. An analytical framework was built to analyse the subsidiary-headquarters relationships, the role played by the subsidiary in the local supply
networks and the specifi c features of the distinct types of subsidiaries. The outcomes show that, in the Brazilian context, where the lack of regulatory constraints allows that multinational corporations (MNCs) operate under a high level of autonomy, the structure of the local supply chain tends to refl ect the structure of the chain at global level. In that case, the way in which the global leader, the MNC that exerts the governance of the chain, considers competence formation at the headquarters and at the subsidiary level, as well as the competences that exist ingrained in fi rms and institutions at local level, are the main determinants of the overall confi guration of competences