Homework Question on Why Firms become Multinational Enterprises
- Why do firms become multinational enterprises?
- Using examples, explain what motivates organisations to engage in international business and how they internationalize.
- Please write the essay based on “International Business” Knowledge.
- In the essay, their need to be included 5 main examples (5 Multinational firms).
- I have no preference on the firms to include but they need to be from the same decor so that they can be compared throughout the essay.
- I was thinking of energy based company’s. In addition, the essay needs to be structured
- The textbook we used to study this subject is “Rugman, A.M. and Collinson, S. (2012) International Business, 6th Edition, FT/Prentice Hall.”
- It could help to write the essay.
- Include (as reference) as many different readings as possible; articles and journals etc.
- In addition, everything needs to be referenced.
Homework Answer on Why Firms become Multinational Enterprises
A multinational establishment, according to Dunning & Lundan (2008), is defined as a corporation, which operates in different countries with affiliate branches that are effective. A multinational enterprise can also be described as a company engaging in foreign direct investments, and owning or controlling such activities in various countries (Dunning, & Lundan, 2008). In this kind of arrangement, both the ‘home’ and ‘host’ countries are responsible for the provision of necessary activities that are related to the company’s areas of operations.
Dunning, & Lundan (2008) further asserts that the formation of multinational enterprises can be traced back to ancient Greece and Egypt where most commercial activities thrived, and spread to other parts of the world. Currently, the inherent problem of ‘globalization’ has made it difficult to transform a firm into a multinational establishment. Accomplishing this task is easy as long as some important issues are taken into consideration (Sally, 2013).
A firm aiming at becoming a multinational enterprise is obliged to put into contemplation some significant drivers that are necessary for this type of endeavor (Greenaway, Sousa, & Wakelin, 2004).The drivers involve instituting an open market economy based on liberated trade ideals, raising the levels of growth and development in the corporate sector, and initiating strong connections between countries all over the world.