Multinational Enterprise
Multinational Enterprise
The multinational enterprise, or MNE, has a worldwide approach to for-
eign markets and production and an integrated global philosophy
encompassing both domestic and overseas operations. The true MNE will usually utilize most of the operating forms that we have discussed. Because of the difficulty of ensuring whether a firm has a "worldwide approach," narrower operational definitions emerge. For example, some might say that a firm must have production facilities in some minimum number of countries or be of a certain size in order to qualify as an MNE. The term multinational corporation, or MNC, is also common in the literature of international business and is often used as a synonym for MNE. We prefer the MNE designation because there are many internationally involved companies, such as accounting partnerships, that do not use a corporate form.
Another term sometimes used interchangeably with MNE, especially by the United Nations, is_transnational corporation, or TNC. This term is used also to refer to a company owned and managed by nationals in different countries. To avoid confusion, we shall use TNC only in its latter meaning throughout the text.
Some writers separate MNEs into two categories. The global company is one that integrates operations from different countries, such as designing a product or service with a global market segment in mind or making different parts of a product in different countries. The multidomestic company is one that allows each country's operations to be very independent.
The multinational enterprise, or MNE, has a worldwide approach to for-
eign markets and production and an integrated global philosophy
encompassing both domestic and overseas operations. The true MNE will usually utilize most of the operating forms that we have discussed. Because of the difficulty of ensuring whether a firm has a "worldwide approach," narrower operational definitions emerge. For example, some might say that a firm must have production facilities in some minimum number of countries or be of a certain size in order to qualify as an MNE. The term multinational corporation, or MNC, is also common in the literature of international business and is often used as a synonym for MNE. We prefer the MNE designation because there are many internationally involved companies, such as accounting partnerships, that do not use a corporate form.
Another term sometimes used interchangeably with MNE, especially by the United Nations, is_transnational corporation, or TNC. This term is used also to refer to a company owned and managed by nationals in different countries. To avoid confusion, we shall use TNC only in its latter meaning throughout the text.
Some writers separate MNEs into two categories. The global company is one that integrates operations from different countries, such as designing a product or service with a global market segment in mind or making different parts of a product in different countries. The multidomestic company is one that allows each country's operations to be very independent.
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