We must first define between a national firm and one that is multinational. A definition of a national firm could be "a firm that's 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 (MNE's) 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, J.Dunning 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 h

National firms become multinational to increase Global Sales, as Drucker has argued we live in "the age of Social transformation" whereby be have more disposable income. Many smaller national companies have turned multinational to expand production activities abroad, this can account for a number or MNE's originating from developing areas like Hong Kong and South Korea. What has been key to there success is the improvement in technology, transportation, production processes and communications.

as 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 corporation."(Internet Encarta) Which would suggest that most large national corporations are in fact multinational because of the very fact that a website makes them Global and open to a foreign market but this is somewhat wrong because it does not fulfil the criteria of FDI in a country.

To conclude as Raymon Vermon argues companies become multinational as the advantages abroad meant, cheaper labour, cheaper raw material and so on which reduces unit costs. Thus you become more competitive and are able to increase sales. This view though is becoming increasingly archaic as Dicken would argue in the Global Shift; this is no longer the sole reason for becoming multinational, it does not take into account "the intricate ways in which firms engage in international operations through various collaborative ventures". On the other hand Steven Hymer argues "that it must have an advantage over its host firms" to become multinational. Essentially though there are three main stages in the evolution to become a multinational. The company must rely on export and expansion of export sales to justify building new plants abroad, a Sony power point presentation found on the internet argued the criteria for a MNE to be "A companies whose foreign sales are at least 25%." Secondly foreign production, there must be a limit to foreign sales that is being halted by being a national company. Lastly the company needs to begin planning, organising, co-ordinating, production, R+D, marketing and financing to become multinational. In deciding whether the reasons for becoming multinational have changed, considering the "buzz" word has only been around for the best part of 40 years it is fair to say that it hasn't. M

Some common words found in the essay are:
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Approximate Word count = 1837
Approximate Pages = 7 (250 words per page double spaced)