Multinational Corporations

Abstract

A multinational corporation (MNC) is an organizational vehicle to transfer knowledge from one country to another while preserving cash flow and control rights. The MNC has its origins in the uncertainty of international trade and investment, and its modern form coevolved with the emergence of institutional and political structures that permitted owners to realize and retain profits from the utilization of its organizational knowledge in foreign countries and territories. Since operating overseas incurs costs, the MNC is only viable if its transfer of organizational capabilities permits it to compete effectively against domestic and other foreign competition. With the diffusion of knowledge, local competitors often compete with the MNC in the long run. However, an MNC has the advantage of profiting from arbitraging across markets and leveraging its scale and scope globally. The impact of the revolution in information technologies has consequently an ambiguous effect, both enabling the MNC to operate globally more effectively and enabling markets to contract to more efficiently compete against organizational solutions.

A socioemotional wealth perspective on how collaboration intensity, trust, and international market knowledge affect family firms’ multinationality

“…Unlike unidimensional views of internationalization as independent measures of foreign sales as a percentage of total sales, or foreign assets as a percentage of total assets, or number of foreign countries in which the firm is active, a multidimensional view implies that: multinational enterprises' actions across each of these dimensions are not independent from each other (Verbeke & Brugman, 2009); an enterprise can both export and own or control producing facilities in more than one country simultaneously (Dunning, 1971); internationalization is characterized by a complex decision-making process (Nielsen & Nielsen, 2011); and multinational enterprises can vary in the extent of their multinational activities (Kogut, 2001). Differing levels of risk and control as features of international activity will influence strategic choice because owners and managers of multinationalizing firms must maximize the utility of international expansion (Kraus, Ambos, Eggers, & Cesinger, 2015) and must control operations in a foreign country effectively to this end (Kogut, 2001). In family firms, those utilities are not limited to traditional notions of economic or financial wealth but extend to the socio-affective and nonfinancial; and control extends to how the family retains its sovereignty over each aspect of business activity.…”

Bottom-Up Lean Practice Deployment in a Global Setting: A Case Study from the Pharmaceutical Industry

“…Logically, strategic plans will include new requirements and be revised frequently, followed by exploiting existing company-specific competencies and resources. Because one of the essential benefits of a global company is the transnational use of its intra-company resources, the deployment of 'best practices' within the company's network is of importance for competitive advantage [4], [5]. It demands efficient intra-organizational processes, including both global and local levels, for continuous practice development within the corporate network.…”