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Title: Multinational Corporations Control Structure Choices under Uncertainty Environment
Source: International Conference on Engineering and Business Management 2012(Part 2 Enterprise Operation and Management(2)) (pp 1158-1161)
Author(s): Jianhua Ma, Management and Economics, University of Electronic Science and Technology of China, Chengdu, China
Xingzheng Ai, Management and Economics, University of Electronic Science and Technology of China, Chengdu, China
Abstract: For a multinational corporation manufacturing and selling two kinds of substitute products under the price as well as exchange rate uncertainty, what control structure would be chosen is tied closely to the corporation performance. By calculating the equilibria and performance of both horizontal integration and disintegration structures, we identify the dominant control structure of the two-product multinational corporation. We furthermore analyze the impact of the degree of risk-aversion, substitute coefficient and risks on control structure choice.
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