Introduction

Abstract

Ever since Malnight’s 1995) seminal paper, which put forward that globalization occurs at the level of the function, scholars have increasingly set the focus on examining how companies can effectively make use of their far-flung marketing, manufacturing or research and development (R&D) activities (Carpano and Chrisman, 1995; Nobel and Birkinshaw, 1998; John, Young, and Miller, 1999; Sheth and Parvatiyar, 2001; Zou and Cavusgil, 2002; Kim, Park, and Prescott, 2003; Xu, Cavusgil, and White, 2006). Global integration represents the last phase of internationalization, as companies turn from a country-by-country towards a global orientation in strategy development and implementation (Porter, 1986; Douglas and Craig, 1989; Galbraith, 2000; Kaufmann and Panhans, 2004). This transition is critical, since in many industries competition is based on the ability of the firm to integrate its subsidiary activities across geographical locations for achieving scale, scope and learning economies (Porter, 1986; Bartlett and Ghoshal, 1989; Ohmae 1989; Yip, 1992). Thus, the current academic discussion provides compelling arguments for the strategic necessity of global functional integration for Multinational Companies (MNCs) facing global competition, suggesting that its application is positively related to firm performance (Xu et al., 2006).