Understanding and Managing the Multinational Firm

The multinational firm possesses certain kinds of advantages that set it apart from purely domestic firms. This article establishes the economic advantages of the multinational firm, describes the various strategies and organizational structures that can be used to maximize its advantages relative to local firms in the foreign countries in which it operates, and outlines the various sociopolitical issues that it needs to attend to in order to successfully operate in a foreign market. Increased attention to the fundamental economic, strategic, organizational, and sociopolitical principles of multinational management is proposed as the best way to avoid the costly mistakes that may be made because of the greater speed of international business resulting from globalization and the use of information technologies.