The Transnational Transition and the Multinational Firm

Abstract

Virtually all of the literature of the MNC assumes that the modern or Westphalian international order of geographically defined sovereign states is the context in which international business takes place. I argue that we are in the midst of a deep-seated systemic transformation to a transnational or post-Westphalian world order characterized by a redefinition of space and geography, the fragmentation of political authority and a more diffuse distinction between public and private spheres. The emergence of a transnational order will have significant implications for the multinational firm in terms of the depth of its involvement in politics and how it formulates strategy. MNCs will both be subject to and a participant in governance, the latter in terms of hybrid public–private regimes. Strategy will have to be reformulated to incorporate a non-territorial context where firms function as actors in the international political process.