Sustaining multi-national subsidiaries operations in the electronics industry in Ireland

Abstract

US multi-national corporations' (MNC) subsidiaries operating in the electronics industry represent a significant and important grouping of the high tech manufacturing sector in Ireland based on the number of people employed, turnover, innovative activities, contribution to Irish gross domestic product (GDP) and the smart economy. The sustainability of such operations in Ireland is dependent on the embeddedness of these organisations in the Irish economy. Sustaining such operations in the Irish economy has become increasingly difficult given the current challenging economic times and dynamics at play in global markets. This paper seeks to understand the nature of MNC subsidiaries in Ireland operating in the electronics industry. To do this an exploratory qualitative study was undertaken. This involved conducting a number of structured interviews with senior managers in the three largest US MNC subsidiaries operating in the electronics industry in Ireland. The findings from the study show that US MNC subsidiary operations are sustainable and that they are embedded in the Irish economy and as a consequence play a key role in terms of their respective contributions towards the 'smart' economy. However there are significant challenges that remain. The internal challenges facing subsidiaries centre on the continuous efforts of management to implement initiatives geared toward increasing subsidiary embeddedness through a process of innovation and renewed investment. The external challenges that can directly impact subsidiary operations include the possible harmonisation of corporation tax rates across Europe and the increasing cost of doing business in Ireland. These issues are explored in more detail in this paper.