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Why do national firms become multinational Critically Discuss We must first define between a national firm and one that is multinational A definition of a national firm could be a firm thats market is mainly in the country it sells into and has no Foreign Direct Investment in any other country apart from the one in which it sells into A multinational on the other hand is a lot harder to define because over time the very nature of a multinational has changed For Example in 1958 Maurice Bye began to see and recognise multinational enterprises MNEs by the definition Multi-territorial firm indicating that a MNE was purely given the name by the amount of countries a company occupied By 1960 this had already been updated with David Lilienthal new definition Multinational Corporation that has become a recent standard definition Academics see a multinational in greater depth and again the definitions are always slightly different JDunning defines a MNE as an enterprise that engages in Foreign Direct Investment FDI and owns or controls value adding activities in more than one country 1992 Dicken on the other hand believes a Trans-national corporation is a firm that has the power to co-ordinate and control operations in more than one country even if it does not own them This illustrates the problems of defining a multinational although we can see that there are common themes We can therefore assume for the purpose of this text that a multinational is firm that has headquarters in one country but with bases manufacturing or assembly plants in others However Quelch and Klein argue that Any company that establishes a site on the Internet automatically becomes a Multinational corporationInternet Encarta Which would suggest that most large national corporations are in fact multinational because of the very fact that a
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