Internationalization is the modern incorporation of the concept of free trade. It is the process whereby trade in goods and services (also involving free capital flow and transfer of technology) is carried on between countries so that there is an ultimate creation of interdependence between the nations of the world. The main aims of Internationalisation are to expand sales, acquire resources like technology and information, and to minimize business risks. There is a strong notion that Internationalisation benefits only a few rich shareholders and that it does not very much benefit other stakeholders. The notion is controversial, as there are indications that Internationalisation does, in fact, benefit other stakeholders as well. A detailed review of this subject is provided in the following pages with suitable examples.The agent that spreads the concept of Internationalisation, one which is the very core of that concept, is the Multinational Enterprise (or Multinational Company, or Transnational Corporation). A Multinational Enterprise owns facilities and other assets in its home nation as well as in foreign countries (at least one). Operations are conducted from a centralized head office that organizes and directs offices and/or factories located in foreign countries (Financial Dictionary). Multinational activities cover a wide range of sectors like financial services, manufacturing, communication services, energy, trade, raw materials, capital, and transport.In the present world scenario, almost all Multinationals in operation belong either to the U.S., Western Europe or Japan. nearly one third of the world’s production is controlled by a group of just 200 Multinationals (Financial Dictionary). By the end of the 20th century, Multinationals generated $ 7 trillion (equal to 70%) of world trade. Nestle is the world’s leading Multinational: in 2001 the ‘Economist’ estimated that 87% of its assets, 97% of its workforce and 98% of its sales solely belonged to its overseas network (Sherman, 2001).
Internationalisation Benefits NoOne Other than a Few Rich Shareholders