"Corporation that has production facilities or other fixed assets in at least one foreign country and makes its major management decisions in a global context; sometimes called transnational corporation".2 however the Harvard multinational enterprise project required subsidiaries in six or more nations (Vernon, 1971, p. 11).
According to Ferdows (1997), the reasons behind formation of MNCs include:
reduce direct and indirect costs;
reduce capital costs;
reduce logistics costs;
overcome tariff barriers;
provide better customer service;
spread foreign exchange risks;
build alternative supply sources;
preempt potential competitors;
learn from local suppliers, foreign customers, foreign competitors, and foreign research centers; and
attract talent globally.
The earliest studies of MNCs were strongly influenced by the economics paradigm with the focus on offshore manufacturing. In the first major research project on multinational corporations at Harvard in the late 1960s, a multinational was defined as a firm that had production facilities in several countries, a definition which became standard in the early international management literature (Ghoshal and Westney,1993).As the world starts to globalize, it is accompanied by criticism of the current forms of globalization, which are feared to be overly corporate-led. As corporations become larger and multinational, their influence and interests go further accordingly. MNCs... [continues]
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