Sample Essay: Multinational Corporations

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Multinational corporations
Multinational corporations have facilities and assets in a country other than its own country. Multinational corporations are considered to be very large in size and operations such that if their budget was to be calculated, it would exceed that of many small businesses. The purpose of this paper is to provide a general overview of multinational corporations, including the criterion of determining who owns a multinational corporation, procedures used by multinational corporation to ensure a new market, operations of a multinational corporation, and the concerns of a multinational corporation (Rutenberg, 1970).

Ownership Criterion of a Multinational Company
When two or more individuals of a country's nationality own a parent company effectively, the firm becomes a multinational company for example, UIiver and Shell which are controlled by Dutch and British nationals (Rutenberg, 1970).

Transfer of Knowledge flows in Multinational Corporations
Competition within businesses has been on the constant rise over the past years. Knowledge based resources have been considered to be a strategic resource of the multinational corporation firm (Rangan & Sengul, 2009). It is considered strategic since it provides the multinational corporations with a competitive advantage which lasts for a long time. Management of knowledge is considered a tool of strategy in the management of information flow within and outside of an organization.

(Please see the attached file)

Figure 1: Model of knowledge exploitation and exploration in a multinational corporation.

The model above shows the interrelated aspects of knowledge management within an international environment. A single type of knowledge is normally related to a firm's specific resource therefore demonstrating that firms are also institutions of generating knowledge. From the above diagram, organizational learning provides a knowledge base of the firm which is normally transferred through borders as the international activities form a basis of generating international knowledge and extending the organizational capacity of using knowledge at the international level. However, the absorptive capacity of the organizational learning is the main facilitator of the process. If the knowledge is not well absorbed, organizational learning takes place first before the actual process of exploiting knowledge begins (Rutenberg, 1970).

Operations of Multinational ...