In 1980, NCR’s subsidiary in Dundee, Scotland, was on the verge of closure. The operation had been established as a second-source manufacturer of NCR products, but a combination of technological changes in the marketplace, along with internal problems, had caused it to shrink from 6,500 employees in 1969 to 770 in 1980. Moreover, Dundee’s most promising product, the automatic teller machine (ATM), was struggling in the British marketplace because of serious quality problems.
Jim Adamson, the newly appointed general manager, had a mandate to turn the operation around — or close it. At an operational level, Adamson worked on improving manufacturing quality and restoring the confidence of major customers. At a more strategic level, he began to develop a vision for Dundee as NCR’s strategic center for the ATM business. Product development responsibility officially lay with headquarters (HQ) in Dayton, Ohio, but Adamson began directing his resources toward upgrading and renewing the Dundee product line to meet the emerging demands of its key customers, the big British banks. In the face of active resistance from the development group in Dayton, Adamson pursued a delicate strategy of cooperating with people there, while continuing privately to sponsor Dundee’s research program.
His persistence paid off. In 1982, Dundee launched a successful product upgrade and, eighteen months later, a next-generation ATM that set new standards in functionality, reliability, and serviceability. By 1984, Dundee had 20 percent of market share worldwide, and by 1985, headquarters officially transferred responsibility for the global ATM business to Dundee. By 1986, Dundee boasted 35 percent of worldwide shipments, surpassing competitors IBM and Diebold.
More than a good example of turnaround management and strong leadership, the Dundee success story provides insight into the changing relationship between headquarters and subsidiaries in large multinational corporations (MNCs). During a five-year period, NCR Dundee developed from being a second-source manufacturer, totally reliant on Dayton for product specifications, to a self-sufficient operation with leading-edge expertise in ATM development. More important, the turnaround went far beyond what corporate management had requested; indeed, many people in the head office had resisted Adamson’s shift into product development, hanging on to their idea of Dayton as the global center for ATM development. Ultimately, it was Adamson’s deliberately unconventional and somewhat subversive approach that provided the impetus for Dundee’s resurgence — and led to NCR’s leading position in the global ATM industry.<