Identifying the Capability Gaps in a Multinational Corporation - A Comparative Case Study of the Global Purchasing Departments of Volvo Cars Corporation in Sweden and China

Abstract

In today’s competitive global economy, one of the most encountered strategies in a multinational company is to take advantage of capabilities residing across different locations. It is widely recognized that a company’s ability to successfully leverage such capabilities can be a significant source of long-standing competitive advantage. Former research has identified the dimensions and possible characteristics of core competences, but comparisons between employees in different organizations are still limited. This study is based on Volvo Cars Global Purchasing Department, which although split between Gothenburg, Sweden and Shanghai, China acts as one integrated purchasing organization. The study’s main purpose is to identify and compare the competence gaps between the two offices and determine what is causing them. The study is exploratory and uses the research method of multi-source feedback. 52 interviews were taken in total. The empirical findings indicate that some capability needs are similar between the two offices; however, the differences are significant. The knowledge base and values cause the majority of differences in personal competence gaps. In addition, a further finding points to the significance of the business environment in which the employees are embedded. Suggestions concerning different competence development approaches in the two centers are provided.