Rethinking the Transnational Firm

Abstract

Despite the vast academic literature that has developed over the last 30 years, the terminology used with regard to multinational firms (MNCs) or ‘transnational firms’ (TNCs) is hardly clear. Many academic writers and researchers still refer to ‘MNCs’ or ‘multinational enterprises’ (MNEs), never mentioning the term ‘transnational firm’. For example, Held etal (1999) — the influential globalization theorists referred to in the last chapter — refer only to MNCs as a generic term for the world’s largest private companies. The book, like many others (Hu 1992; Dunning 1993a; Dicken 1998), charts the historical rise of multinational business enterprises from the nineteenth century and earlier, moving on to consider how MNCs are responsible for the globalization of production in the world economy. Such an academic line of analysis is now well rehearsed (North 1985; Wilkins 1991; Jones 1992) and it is not my intention to reiterate the history of the MNC again here. What is more important to the argument of this book, is the question of what an MNC or TNC is, and whether all such organizations can be easily discussed and theorized so as a category in the contemporary world. The argument of this chapter is that TNCs cannot be clumped together as one category (and increasingly so). To understand why this is the case, and to find a path through the various, apparently overlapping, definitions of these business organizations, it is first necessary to differentiate these three terms: the MNC or MNE, the TNC and the global corporation.KeywordsForeign Direct InvestmentCorporate GovernanceOrganizational FormGlobal EconomyBusiness OrganizationThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.