IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v43y1997i3p313-333.html
   My bibliography  Save this article

Optimizing an International Network of Partially Owned Plants Under Conditions of Trade Liberalization

Author

Listed:
  • Sriram Dasu

    (School of Business Administration, University of Southern California, Los Angeles, California 90089-1421)

  • José de la Torre

    (Anderson Graduate School of Management, University of California at Los Angeles, Los Angeles, California 90024)

Abstract

For the last four decades the preferred economic philosophy in much of Latin America was that of import-substituting industrialization. As a result multinational corporations (MNCs) approached different countries with the expectation that each plant would primarily serve its domestic market. Each of these plants was partially owned by the MNC. Beginning in the late 1980s, Latin America countries began decreasing barriers to cross-border trade. This made competition between the units belonging to a common network possible for the first time. Operations which had subsisted side by side in spite of differences in costs and quality of output, and which were under the control of different owners now found themselves in competition with one another and having to rationalize their efforts. In this paper we analyze the problem of operating a network of plants under conditions of free trade and exchange rate fluctuations, when the firms that compose it are partially-owned subsidiaries of an MNC. A model of three subsidiaries and four countries is developed for one industry, based on actual corporate and economic data. We study the problem of coordinating the activities of the subsidiaries and allocating the gains arising from coordination.

Suggested Citation

  • Sriram Dasu & José de la Torre, 1997. "Optimizing an International Network of Partially Owned Plants Under Conditions of Trade Liberalization," Management Science, INFORMS, vol. 43(3), pages 313-333, March.
    • Handle: RePEc:inm:ormnsc:v:43:y:1997:i:3:p:313-333
    DOI: 10.1287/mnsc.43.3.313
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.43.3.313
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.43.3.313?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Newburry, William & Gardberg, Naomi A. & Sanchez, Juan I., 2014. "Employer Attractiveness in Latin America: The Association Among Foreignness, Internationalization and Talent Recruitment," Journal of International Management, Elsevier, vol. 20(3), pages 327-344.
    2. Chung-Lun Li & Panos Kouvelis, 1999. "Flexible and Risk-Sharing Supply Contracts Under Price Uncertainty," Management Science, INFORMS, vol. 45(10), pages 1378-1398, October.
    3. José R. Torre & José Paulo Esperança & Jon I. Martínez, 2011. "Organizational Responses to Regional Integration Among MNEs in Latin America," Management International Review, Springer, vol. 51(2), pages 241-267, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:43:y:1997:i:3:p:313-333. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.