Commercial pressure, local responsiveness and synergies in globalised engineering services

This paper investigates how medium-size engineering service companies working traditionally in national markets have engaged with challenges of globalisation and competition from multinationals. The Nordic region has many smaller domestic engineering services companies in the industry, which are under pressure in their established national and wider international markets. The research uses mixed-methods with empirical data from a desk study of sector development supplemented by qualitative studies of individual companies. It also includes comparative case study analyses of two medium-size engineering service companies with headquarters in two different Scandinavian countries. Among the companies studied there is a plethora of strategies and diversification into other revenue generating activities. Mergers and acquisitions are the most important strategies among the largest companies. Also there are a number of network strategies involving local resources from sister companies etc. The case companies illustrate many of the findings. They both have a multidisciplinary profile in the Nordic region while establishing a more limited presence in North America and elsewhere in Northern Europe. They are also developing a global business focusing on separate areas such as large bridges, environmental consulting, developmental consulting and industrial engineering. The research reveals an array of different strategic positions that combine local, regional and global elements resulting in unique strategic “bundles”. The paper adds to strategic technology management concepts and approaches by identifying the strong role of emergent strategy moves made by senior managers in the companies. It complements established theory and practice concerning the Resource-Based View and Knowledge-Based View as well as on network operations and extended enterprises.