The Role of International Firms in Latin American Automotive Industry

The desire of Latin American governments to promote social, economic, and political development can create the necessity for hard choice between sometimes conflicting subaspects of the general developmental goal. An illustration of this is the conflict between the objective of promoting a qualitative and quantitative change in the goods and services produced by their national economies, and the desire for increased national independence defined as the attainment of complete autonomy of decision-making with respect to each economic sector. Such conflict stems from the technological implications of producing “modern” goods and services. To produce these goods efficiently it is imperative that the basic technical relationships of their production not be violated. This often implies heavy capital investment in product development, production process development, and the establishment of extensive distribution networks. The key prerequisite, however, is the organizational ability to develop, accumulate and coordinate the myriad physical and human resources necessary for producing the desired final output. It is often the case that a very high production volume is often required to permit the effective utilization of these technical and organizational inputs in order to minimize the unit costs of final output.© 1972 JIBS. Journal of International Business Studies (1972) 3, 51–68