The Dilemma of Key vs. Operational Functions in Multi-National Corporations
The landscape of international multi-currency corporations is increasingly characterized by significant inefficiencies and misalignments between key operational functions and strategic business growth. As Thomson Reuters’ research reveals, while multinational corporations have long embraced the interplay between managing a broad range of functions like tax, trade, legal, and compliance, the disconnection between these nurturing domains and the immediate, high-priority strategic goals is growing. This disconnect is particularly pronounced in the face of global trade wars, geopolitical uncertainties, and economic volatility, as well as the rapid pace of technological transformation. In such a context, the value for executives is often achieved through purely operational tactics, which can undermine the alignment required for truly impactful growth strategies.
For example, as C-suite leaders are grappling with how to navigate global trade dynamics, increasing geopolitical tensions, or rapidly evolving regulatory landscapes, there is a growing mismatch between how these strategic priorities are prioritized and how they are implemented. The research highlights that key enabling functions, such as tax and HR, are frequently overlooked in favor of more tactical departments like the Technology and Customer Success Teams. This misalignment creates additional risks for executive decision-making, as the focus remains on operational agility rather than strategic growth. Moreover, the underestimation of the role these functions play during times of uncertainty and high-pressure environments exacerbates this discrepancy.
However, despite these challenges, the research also reveals emerging opportunities forprovocation and optimization. For instance, the rise of artificial intelligence as a transformative force within larger corporations offers a new avenue for elevating the roles of legal, accounting, and compliance functions. By properly integrating AI tools and leveraging these functions to amplify risk management capabilities and accelerate innovations, organizations can turn these previously perceived constraints into strategic advantages.
But this transformation requires a fundamental shift in how leaders communicate and governance their business. While the identified constraints, such as simplified compliance processes and fragmented data flows, are undeniable, the research suggests that a more comprehensive approach can address these challenges. By investing in "enabling" functions, which include functions like tax, trade, and procurement, and by fostering deeper cross-functional collaboration among executives, companies can turn these barriers into opportunities for competitive differentiation.
In conclusion, despite the complexities of the modern business environment, the interplay between key operational functions and strategic priorities remains critical for driving growth and achieving long-term success. As multinational corporations navigate the challenges of globalization and technological change, managing the relationships between these critical enabling functions and executive priorities will remain the most vital strategic choice.
