Why and How Companies Become Multinational Corporations Business Essay
How emerging market companies become multinational corporations - Author: Jean-Fran ois Hennart. The purpose of this article is to demonstrate that existing theories, mainly Dunning's OLI model, Mathews' LLL model and Rugman's version of internalization theory, are unable to explain the rise of multinationals in emerging markets . in foreign economies. Such challenges include poor infrastructure, especially in the developing world, poor transportation and communications and banking systems that lead to higher production costs. Intensive market research is important. Multinational companies face numerous challenges due to the difficulties of operating in different markets and the usual cultural differences between countries. Unlike local firms, multinational firms are typically exposed to global pressure groups, both at home and in host countries. Furthermore, the easiest way to become a monopoly is to obtain a license to operate abroad, for the government to grant a company exclusive rights to provide goods or services. The East India Company, to which the English government granted permission.