Abstract
This paper aims to examine the decision process for the divestment of foreign subsidiaries, from the perspective of managers of pharmaceutical manufacturing subsidiarieslocated in Puerto Rico. The analysis provides evidence that relations with the parent firms were cooperative and no obstructive, and that foreign management assumed overall control during the implementation of disinvestment decisions; however, there was insufficient evidence to demonstrate involvement as initiator or coordinator of the divestment process or to show they were kept informed before the decision to divest was made. Finally, it showed that the increase in the expiry of patents did not increase participation of executives in the evaluation of their plants.References
Balogun, J., & Johnson, G. (2004). Organizational restructuring and middle manager sensemaking. Academy of Management Journal, 47, 523-549.
Belderbos, R., & Zou, J. (2008). On the growth of foreign affiliates: Multinational plant, networks, joint ventures, and flexibility. Journal of International Business Studies, 38(7), 1095-1112.
Benito, G. (1997). Divestment of foreign production operation. Ap-plied Economics, 29(10), 1365-1377.
Benito, G. (2005). Divestment and international business strategy. Journal of Economic Geography, 5(2), 235-251.
Benito, G., & Welch L. S. (1997). De-internationalization. Manage-ment International Review, 37(2), 7-25.
Bergh, D. (1997). Predicting divestiture of unrelated acquisitions: an integrative model of ex ante conditions. Strategic Management Journal, 18, 715-731.
Bergh, D., Johnson, R. A., & Dewitt, R. L. (2008). Restructuring through spin-off or sell-off: Transforming information asym-metries into financial gain. Strategic Management Journal, 29(1), 133-148.
Bettauer, A. (1967). Strategy for divestment. Harvard Business Review,45(2), 116-124.
Boddewyn, J. (1976). Divestment: local vs. foreign, and U.S. vs. Euro-pean approaches. Management of International Review, 19, 21-28.
Boddewyn, J. (1979). Foreign divestment: magnitude and factors. Journalof International Business Studies, 10(1), 21-27.
Boddewyn, J. (1983). Foreign and domestic divestment and invest-ment decisions: like or unlike. Journalof International Business Studies, 14(3), 23-35.
Boddewyn, J. (1985). Theories of foreign direct investment and di-vestment: A classificatory note. Management International Review,25(1), 57-65.
Boddewyn, J., & Torneden, R. (1973). U.S. foreign divestment: A pre-liminary survey. Columbia Journal of World Business, 8(2), 25-29.Brauer, M. (2006). Corporate and divisional manager involvement in divestitures—a contingent analysis. Journal of Management, 20, 341-362.
Brauer, M. (2006). What have we acquired and what should we ac-quire in divestiture research? A review and research agenda. Journal of Management, 32(6), 751-785.
Capron, L., Mitchell, W., & Swaminathan, A. (2001). Asset divesti-ture following horizontal acquisitions: A dynamic view. Strategic Management Journal, 22(9), 817- 844.
Chastain, C. (1987). Corporate asset management: A guide for financial and accounting professionals. New York, NY: Quorum Books.
Dickinson, J. (1993). Non parametric statistics: An introduction. New-bury Park, CA: Sage Publications.
Dillman, D. A. (2000). Mail and internet survey‘s: The tailored design method. Hoboken, NJ: John Wiley&Sons.
Duhaime, I. M. (1981). Influences on the divestment decisions of large diversified firms (Unpublished doctoral dissertation). University of Pittsburgh, Pennsylvania.
Duhaime, I. M. (1984). The divestment behavior of large diversified firm. Oxford, OH: Planning Executives Institute.
Duhaime, I., & Baird, I. (1987). Divestment decision-making: The role of business unit size. Journal of Management,13(3), 483-497.
Duhaime, I., & Grant, J. (1984). Factors influencing the divestment decision-making: Evidence from a field study. Strategic Manage-ment Journal, 5(4), 301-318.
Duhaime, I., & Schwenk, C. R. (1985). Conjectures on cognitive sim-plification in acquisition and divestment decision. The Academy of Management Review, 10(2), 287-295.
Eisenhardt, K. M. (1989). Buildings theories from case study re-search. The Academy of Management Review, 14(4), 538-550.
George, D., & Mallery, P. (2005). SPSS for Windows: Step by step, Boston, MA: Pearson Education.
Ghertman, M. (1984). Decision-making in multinational enterprises: Concepts and research approaches. Retrieved from http://www.ilo.org/empent/Publications/WCMS_126552/lang--en/index.htm
Ghertman, M. (1988). Foreign subsidiary and parents role during strategic investment and divestment decisions. Journal of International Business Studies, 19(1), 47-67.
Gibbons, J. D. (1993). Nonparametric statistics: An introduction. Newburry Park, CA: Sage Publications.
Gilmour, S. C. (1973). The divestment decision process (Unpublished doctoral dissertation). Harvard Business School, Boston.
Gopinath, C., & Becker, T. (2000). Communication, procedural justice, and employee attitudes: Relationships under conditions of divestiture. Journal of Management, 26(1), 63-80.
Griffin, R. (2003). Subsidiary divestment: The case of CDMI Ireland 1970-2002. Irish Journal of Management, 24(1), 215-228.
Hamilton, R., & Chow, Y. (1993). Why managers divest evidences from New Zealand‘s largest companies. Strategic Management Journal, 14(6), 479-484.
Hayes, R. (1972). New emphasis on divestment opportunities. Harvard Business Review, 50(4), 55-64.
Hayes-Goddar, S. (1997). Drivers for the divestment of foreign subsidiary: An exploratory study (Unpublished doctoral dissertation). Temple University, Pennsylvania.
Haynes, M., Thompson, S., & Wright, M. (2007). Executive remuneration and corporate divestment: Motivating managers to make unpalatable decisions. Journal of Business Finance and Accounting, 34(5-6), 792-818.
Jarillo, J., & Martínez, J. (1990). Different roles of subsidiaries: The case of multinational corporations in Spain. Strategic Management Journal, 11(7), 501-512.
Kaitin, K., & DiMasi, J. (2000). Measuring the pace of new drug development in the user fee era. Drug Information Journal, 34(3), 673-680.
Kesselheim, A. S., Murtagh, L., & Mello, M. M. (2011). Pay for delay-settlements of disputes over pharmaceutical patents. The New England Journal of Medicine, 365(15), 1439-1445.
Kester, S. (2009). Divestitures and their impact on the innovative capacity of firms (Unpublished MBA research). Erasmus University, Rotterdam.
Ketkar, S. (2006). Multinational corporation‘s foreign subsidiary divestiture modes and sustainability of competitive advantages (Unpublished doctoral dissertation). Temple University, Pennsylvania.
Leedy, P., & Ormrod, J. (2001). Practical research: Planning and design. Upper Saddle River, NJ: Prentice Hall.
Mao, R. (2007). The effects of core business divestments on innovations within the pharmaceutical industry: A public policy analysis (Unpublished doctoral dissertation), George Mason University, Washington, DC.
Marks, M. L., & Mirvis, P. H. (2001). Making mergers and acquisitions work: Strategic and psychological preparation. Academy of Management Executive, 15(1), 80-92.
Meyer, A., James, G., & Geoffrey, B. (1990). Environmental jolt and industry revolutions: Organizational responses to discontinuous changes. Strategic Management Journal, 11(5), 93-110.
Moschieri, C. (2011). The implementation and structuring of divestitures: The unit‘s perspectives. Strategic Management Journal, 32(4), 368-401.
Moschieri, C., & Mair, J. (2008). Research on corporate divestitures: A synthesis. Journal of Management &Organization, 14(4), 399-422.
Moschieri, C., & Mair, J. (2011). Adapting for innovation: Including divestitures in the debate. Long Range Planning, 44,4-25.
Muijs, D. (2011). Doing Quantitative Research in Education with SPSS. Thousand Oaks, CA: Sage Publications.
Ness, D. (1979). The divestment decision process in large and medium-sized diversified companies: A descriptive model based on clinical studies. International Studies of Management and Organizations, 8(4), 67-96.
Ness, D. (1981). Increase your divestment effectiveness. Strategic Management Journal, 2(2), 119-130.
Ness, D. (1983). Simulation: A complementary method for research on strategic decision-making. Strategic Management Journal, 4(2), 175-185.
Presser, S., Rothgeb, J., Couper, M., Lessler, J., Martin, E., Martin, J., & Singer, E. (2004). Methods for testing and evaluating survey questionnaires.Hoboken, NJ: John Wiley and Sons.
Porter, M. (1976). Please note location of nearest exit: Exit barriers and planning. California Management Review, 19(2), 21-33.
Porter, M. (1979). The structure within industries and companies‘ performance. The Review of Economics and Statistics, 61(2), 214-227.
Porter, M. (1986). Competition in global industries: A conceptual framework. In M. Porter (Ed.), Competition in global industries(pp. 15-60). Cambridge, MA: Harvard University Press.
Qi, H. (2005). Strategy implementation: The impact of demographic characteristics on the level of support received by middle managers. Management International Review, 45, 45-70.
Rea, L. M., & Parker, R. (2005). Designing and conducting survey research: A comprehensive guide.San Francisco, CA: Jossey-Bass.
Redman, T., Wilkinson, A., & Snape, E. (1997). Stuck in the middle? Managers in building societies. Work, Employment and Society, 11, 101-114.
Rouleau, L. (2005). Micro-practices of strategic sensemaking and sensegiving: How middle managers interpret and sell change every day. Journal of Management Studies, 42, 1413-1441.
Sachdev, J. C. (1976). Disinvestment: A corporate failure or a strategic success. International Businessof Management and Organizations, 18(3), 112-130.
Schmid, E. F., & Smith, D. A. (2002). Discovery, innovation and the cyclical nature of the pharmaceutical business. Drug Discovery Today, 7(10), 563-568.
Shimizu, K., Hitt, M., & Vaidyanath, D. (2004). Theoretical founda-tions of cross-border mergers and acquisitions: A review of cur-rent research and recommendations for the future. Journal of International Management, 10(3), 307-353.
Siegel, S., & Castellar, N. J. (1988). Nonparametric Statistics for Behavioral Sciences. New York, NY: Mc-Graw-Hill.
Simões, V. (2005). Disinvestment by foreign-owned firms: Fact in search of framework. In L. Guyver & F. Beule (Eds.), Transnational corporations and economic development: From internationalization to globalization. Basingstoke, UK: Palgrave Macmillan.
Vissak, T. (2010). Recommendations for using the case study method in international business research. The Qualitative Report, 15(2), 370-388.
Xia, J., & Li, S. (2013). The divestiture of acquired subunits: A re-sources dependence approach. Strategic Management Journal, 34, 131-148.
By submitting a contribution to consideration of the Editorial Board of Fórum Empresarial, the authors attest that it is an original, unpublished work, which has not been nor will be simultaneously submitted to another journal for consideration and publication; that they are responsible for the work carried out and the content of the article; and they have the corresponding copyrights.
The authors grant the right of first publication of their work to Fórum Empresarial, in any medium and physical and electronic format, including internet. Publication shall be subject to the Creative Commons Attribution-NonCommercial 4.0 International License, which allows third parties to share the work, provided that the author and Fórum Empresarial (as a first publication) are cited.
The journal allows authors to retain publishing rights without restrictions. Authors are able to enter into separate, additional arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in Fórum Empresarial.