Abstract
In this essay, we attempt to apply lateral pressure theory to conceptual thinking on MNC. “Power as capability” is implicit in the rationales firms engage in international production, viz., ownership advantage, location advantage, and internalization advantage. It is argued that issues of control (an internalization advantage) are crucial for the MNC, and the development of a complex mechanism for integrating information flow represents one important aspect of its capability. Part Two of this essay will explore in detail “power as influence” perspective of MNC bargaining power, relocation of production, and the impact of environmentalism in its value chains.
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