Management of Overseas Acquisitions by Developing Country Multinationals and Its Performance Implications: The Indian Example

Developing‐country multinationals (DMNCs) make overseas acquisitions to leverage extant capabilities of acquired companies in order to enter foreign markets and acquire their know‐how to enhance their own competitiveness against global competition at home and abroad. We go “inside the black box” to examine how DMNCs manage those acquisitions and the attendant implications for postacquisition performance. When DMNCs keep the acquired firm “structurally separate” from their own organization and retain its senior executives, they exhibit better acquisition performance. Also, “linking mechanisms” to coordinate interdependencies between the two firms improves performance, especially when the acquired firm is kept structurally separate. Analyses of large‐sample data of Indian DMNCs’ overseas acquisitions show that DMNCs’ light‐handed approach to managing acquisitions, despite acquiring majority ownership in them, seems suited to their acquisition objectives. © 2016 Wiley Periodicals, Inc.     

Getting offshoring right

The prospect of offshoring and outsourcing business processes has captured the imagination of CEOs everywhere. In the past five years, a rising number of companies in North America and Europe have experimented with this strategy, hoping to reduce costs and gain strategic advantage. But many businesses have had mixed results. According to several studies, half the organizations that have shifted processes offshore have failed to generate the expected financial benefits. What's more, many of them have faced employee resistance and consumer dissatisfaction. Clearly, companies have to rethink how they formulate their offshoring strategies. A three-part methodology can help. First, companies need to prioritize their processes, ranking each based on two criteria: the value it creates for customers and the degree to which the company can capture some of that value. Companies will want to keep their core (highest-priority) processes in-house and consider outsourcing their commodity (low-priority) processes; critical (moderate-priority) processes are up for debate and must be considered carefully. Second, businesses should analyze all the risks that accompany offshoring and look systematically at their critical and commodity processes in terms of operational risk (the risk that processes won't operate smoothly after being offshored) and structural risk (the risk that relationships with service providers may not work as expected). Finally, companies should determine possible locations for their offshore efforts, as well as the organizational forms--such as captive centers and joint ventures--that those efforts might take. They can do so by examining each process's operational and structural risks side by side. This article outlines the tools that will help companies choose the right processes to offshore. It also describes a new organizational structure called the extended organization, in which companies specify the quality of services they want and work alongside providers to get that quality.     

A dynamic multi-commodity model of the agricultural sector: A regional application in Brazil

This paper develops a dynamic model to analyze the development process in the agricultural sector. Formulated as a recursive linear programming model, it contains several commodities as outputs, farm and regional resource constraints on owned and purchased inputs-including working capital-and several farm sizes. The objective function is assumed to be separable for each farm size and additive for the region and measures for each year the net expected revenues from crop and livestock production less an investment charge. Prices are exogenous. The model is applied to a rapidly developing agricultural region in Southern Brazil and tested for its ability to trace regional farm sector development over a decade. It is then used to analyze the impact of alternative agricultural policies including price and credit subsidies.     

Islands and the demographic transition

The generalization that island states are demographically more modern than continental states, and in particular that they have experienced greater fertility and mortality declines, is examined empirically for the Caribbean and the Pacific. A statistical analysis of recent Caribbean and Latin American data supports the view that island status is linked to an early demographic transition, independently of intervening, socio-economic factors, but the relationship is a modest one. The Pacific island data, however, tend to show the reverse, namely the persistence of high fertility despite favourable standards of living. One of the reasons for this contrast may be the greater importance of plantation agriculture and mass importation of labour in the Caribbean than in the Pacific.     

Implementation with partial verification

This paper examines the implementability of social choice functions when only partial verification of private information is possible. Green and Laffont (1986) used this framework to derive a necessary and sufficient condition for the revelation principle to continue to hold with partial verification. We provide economically interesting characterizations of this condition, which suggest that it may be too restrictive. This leads us to consider implementation (not necessarily truthful) in general, when there is partial verification. We consider the case where compensatory transfers are allowed, giving the mechanism designer further leeway. We show how partial verification may allow efficient implementation of bilateral trade, where it would otherwise not be possible. Received: 1 August 1998 / Accepted: 5 September 2000