Title: Organisational design alternatives within international operations networks: a transaction cost perspective

Authors: Michel Leseure

Addresses: Isle of Man International Business School, The University Centre, Old Castletown Road, Douglas, Isle of Man, IM2 1QB, UK

Abstract: This paper shows, through multiple case studies of Moroccan textile apparel offshore factories, that one organisational design does not fit all within international operations networks. Whereas previous research about managing networks of foreign factories has focused on fully owned production affiliates, a considerable diversity of organisational arrangements is shown to exist. Analysed in the light of transaction cost theory, this diversity suggests that the cost of coordination of foreign factories operating in culturally different countries is high, and has possibly been overlooked in international operations management research. As this paper is primarily a piece of exploratory research, its aim is to document the hybrid arrangements, between markets and hierarchies, that are used by multinationals to cope with coordination costs in practice. Moreover, the potential of |supply chain outposts|, as an organisational innovation used to cope with high coordination requirements, is highlighted.

Keywords: international operations networks; transaction costs; Morocco; textile industry; apparel manufacturing; offshore factories; organisational design; foreign factories; production affiliates; ownership; coordination costs; cultural differences; management research; hybrid arrangements; markets; hierarchies; multinational corporations; MNCs; SCM; supply chain management; outposts; organisational innovation; clothing industry; garment industry.

DOI: 10.1504/IJSOM.2010.035706

International Journal of Services and Operations Management, 2010 Vol.7 No.4, pp.419 - 439

Published online: 03 Oct 2010 *

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