The Governance of the Multinational Enterprise: Insights from Internalization Theory

The Governance of the Multinational Enterprise: Insights from Internalization Theoryjoms_920 460..470 Peter J. Buckley and Roger Strange University of Leeds; University of Sussex short-change The objectives of this paper are to outline the contri andion of internalization theory to our concord of the governance of the MNE, and to highlight aspects of the theory that we believe have acquire insufficient attention in the literature. In particular, we suggest deuce promising lines of future research. The first focuses on the internal transaction cost associated with the governance and organization of the activities within the MNE, and here we highlight the be of information acquisition and transmission, the costs of coordination, and the costs of aligning the interests of divers(prenominal) stakeholders within the MNE. The second addresses the implications of different assumptions about the risk tilt of the MNE. INTRODUCTION Internalization theory has long provided one of the main notional rationales for the existence of the multinational enterprise.

It is founded on the basic idea that the exploitation of firms companionship-based assets across national boundaries is often most efficiently undertaken internally within the hierarchic structure of the multinational enterprise (MNE). Internalization theory has not been without its critics, notably by proponents of the evolutionary theory of the firm (Kogut and Zander, 1993). We believe that much of this criticism is misplaced, but that nevertheless the extant literature on internalization theory has concentrate too much on imperfections in the external markets for companionship transfer. We argue below that not enough attention has been wedded to both the nature and the significance of the transactions costs associated with the internal transfer of knowledge and to some of the underlying assumptions of the theory. In particular, we wish to suggest both promising lines of future research. The first... If you want to get a total essay, order it on our website: Orderessay

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