Strategic Decision Making in Global Supply Networks

Globalization has inexorably affected the economies of many nations in both the developed and developing world. As a consequence, national boundaries are becoming less important to the large, multinational corporations who now operate on a global scale. Corporate global networks range from short term outsourcing contracts to long term investments in developing countries that offer low cost operations and/or the promise of future market expansion. Today the Internet and high-speed data networks enable knowledge tasks to be completed practically anywhere in the world, allowing companies in the developed world to achieve cost savings or simply stay competitive enough to survive by shifting work offshore (Saunders, 2003; Schultz, 2004). As a result, an increasing shift of work to low-cost countries will continue for the foreseeable future. Global supply networks decisions such as supplier selection and distribution assignments are strategic decisions that involve medium to long term commitment. These decisions in turn affect the organization’s future business structure, competitiveness and market value. In the literature there are numerous studies dealing with global supply network decisions in the context of mathematical modeling, risk assessment and conceptual strategic evaluations. The literature can be divided into two categories with respect to the application of tools that are used to analyze and model the corporate decision making processes. One stream of literature extensively utilizes operations research techniques to model the supply networks and assess