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经济学论文代写 Motivations Behind Firms To Become Multinational Enterprises

经济学论文代写 Motivations Behind Firms To Become Multinational Enterprises

Today we are living in the world that is integrated at a global level. It is this integration that is acting as a platform to success for these individual linkages. Any entity that is not a part of this integration cannot succeed. This is the exact concept that implies to organizations prevailing in current globally integrated world. Organizations can be segmented into national firms and multinational firms (MNE’s).

This essay puts light on the motivations behind firms to become an MNE’s. Also the essay discusses how the firms wanting to attain the status of an MNE are actually able to do so. It shows different pathways that can be followed by firms to achieve the global reach.

A national firm is usually referred to as an organization the operating span of which is subjected to the national boundaries of a country and has no investment of any kind beyond the national border. A multinational enterprise (MNE) on the other hand is defined by Dunning (1992) as “an enterprise that engages in foreign direct investment (FDI) and owns or control value-adding activities in more than one country”.

A MNE is an enterprise that has task not only to operate successfully in varying business environment prevalent in different countries but also to coordinate the native conditions in different economies to lucratively deploy the resources at the company’s disposal. The effect of MNE’s can be seen on a global level. The activities of an MNE are visible clearly on both the home country and the host country.

Home country is the one from which the MNE originates, host country is the economy in which an MNE enters to operate. An MNE has a bearing on both the home and the host economies. An MNE is noted to eradicate any local dominance in the host country and thereby forcing the local enterprises to be more efficient if they want to be competitive. MNE’s also has a massive influence on job prospects in both the home and the host economies.

An MNE can significantly increase the job prospects in the host country and also develop the labor skills in the economy. On the contrary MNE’s can adversely affect the labor situation in the home country as its international exposure leads to loss of jobs in the home economy. The above trend can be seen in Indian and Chinese economies. In the year 1990 a total of 200 million people were lifted out of poverty in India and china alone. The Indian and he Chinese markets are the fastest growing economies in the world even surpassing the US, European and the Japanese economies. India and China are the go-to options for the MNE’s when they intend to amplify their profits and scale. ( “`”&HYPERLINK “`”p=HYPERLINK “`”香港) (Forbes’ Robyn Meredith: Hong Kong central in the new supply).

The importance, reach and scope of an MNE can be understood by a simple example of an Indian family driving a Range Rover that run on fuel from Shell going to enjoy a Big Mac from McDonalds. The above line clearly states the extent to which MNE have influences on lives of each individual across the globe. We as consumers, consume goods and services that are manufactured and provided by MNE’s without even being aware of this fact.

Every organization is not capable of converting itself to an MNE. The working and scope of every MNE differs from each other. Hence there are different motivations for every organization to go global. Firms go global primarily to make safe the supply of key materials. This ensures long term security of the firms operation as the key ingredient in the production of the product is secured. Also MNE’s go abroad when they intend to boost their sales and expand their market catering. This is what multiplies the profit many folds and provides a competitive edge over the competition due to a large market presence. The most common reason for a firm to go global is to reduce the cost of production. This requirement pulls the firms to developing economies where the factors of production (land, labor, capital) are relatively less expensive.

经济学论文代写 Motivations Behind Firms To Become Multinational Enterprises