Operating internationally—The impact on operational performance improvement

Krisztina Demeter

International Journal of Production Economics, 2014, vol. 149, issue C, 172-182

Abstract: In this paper we investigate how the level of international presence impacts the operational performance improvement of companies. We identify three parts of international nature: source internationally, manufacture internationally and sell internationally. Each of these bricks can contribute to lower costs through scale economies. Moreover, more people can create more knowledge, higher production volumes lead to better understanding of processes, and thus better quality. But being global also has some drawbacks. Logistics and coordination costs, as well as investment costs due to large and productive machinery can increase; long internal and external supply chains lengthen delivery times, increase risks and reduce flexibility. So in total, it is not evident at all, that being multinational results in higher operational performance improvement, even if these companies’ business performance is usually higher than their competitors’. Analysis is made using the Fifth Edition of the International Manufacturing Strategy Survey (IMSS). It includes 725 companies of 21 countries. According to our results being international in itself does not help in improving operational performance. Consistent strategy and improvement programs are needed. Further important research implication is that due to the complexity of operating internationally configuration approaches, such as cluster analysis might give a more valuable picture than looking at simple variable level relationships.

Keywords: International operations; Operational performance improvement; Source; Manufacturing; Sales (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:149:y:2014:i:c:p:172-182

DOI: 10.1016/j.ijpe.2013.06.008

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