Divesting a Foreign Business Unit: Two Perspectives on the Decision Process in Multinational Corporations

Although the number and size of MNCs continues to escalate, their growth is not without pain. As a result, the MNC is often faced with a decision to divest itself of one or more of its foreign business units. It is therefore important- for researchers and managers to understand the factors that may influence a foreign divestment decision. Although studies on decision-making processes in MNCs have been done, they have tended to focus on the issue of centralization versus decentralization. Relatively few studies have examined the processes involved when a MNC is contemplating specific decisions, such as those leading to the divestment of one of its foreign business units. Therefore, in the preceding sections, we have outlined a number of organizational and behavioral factors that may impact a MNC's decision to divest itself of a foreign business unit.