Explain why and how firms become multinational enterprises Essay

Explain why and how firms become multinational enterprises - Essay Example re than one country and so linked that they may co-ordinate their operations in various ways† (OECDS, 2008, p.12) It is the most common way among several by which foreign direct investments are transmitted outward by the home country, or invested inward into the host country. At times multinational firms are described in terms of equity proportion; some jurisdictions peg a multinational as one whose voting rights are 10% owned and controlled by a foreign entity; other dispensations say 50%. The OECD definition is thus an interesting one in that it specified no ownership proportion, but stresses the operational link among internationally engaged organizations in different countries. These internationally engaged firms are systematically different from those domestically oriented; they are as a rule larger and have a more complex organizational structure and processes. Multinationals are thus more complex to manage (Yeaple, 2009). A multinational enterprise (MNE) is, simply put, a business organization the operations of which spans different countries and is intricately linked to its subsidiaries or other subsidiaries of the same mother firm. Therefore, what then makes a firm into an MNE is the nature of its activities, that its activities are geographically expanded across borders under a common ownership. There are times when a stage of the firm’s operations is intended to be performed in another country, for any number of reasons such as greater cost-effectiveness or locating closer to raw material or human resources. But rather than outsourcing that stage of operations to another, domestic, firm, the company instead sets up its own subsidiary or unit in that country to perform that stage of the operations. There are several ways how a company can internationalize its operations: In all these methods, a substantial amount of long-term funds is committed in the productive activity, which infusion is called the foreign direct investment, or FDI. Forms

What are the causes of ethnic violenceDiscuss with reference to Essay

What are the causes of ethnic violenceDiscuss with reference to Yugoslavia as a case study - Essay Example However, the turning point of the unrest in this area was probably the ratification of the new constitution in 1974 which gave more autonomy to the individual republics that are part of the Yugoslavian jurisdiction (Devic, Ann (1998). According the new constitution, the republics have the option to declare its independence from the federation. Although this provision of the constitution is well-meaning and very democratic, this paved the way for people in the different republics in the Yugoslavian territory to seek independence and become a full-fledged nation on its own. The seed of nationalism is said to be planted by this provision of the constitution and spur the people from the republics to dream of becoming independent. The need to be independent by the republics became more apparent when the Yugoslavian President Josip Borz Tito died in the 1980s (Cairns E. and Roe M. (2003). The tension between the republics became more intense that June of 1991, Slovenia and Croatia decided that they want to become independent and severe their ties with the other federal republics (Cairns E. and Roe M. (2003). Later, in September of the same year, the republic of Macedonia made its intention to become independent while Bosnia and Herzegovina followed in March of 1992(Cairns E. and Roe M. (2003). Unfortunately, Serbia and Montenegro did not approve of the move of Croatia and Bosnia & Herzegovina to leave the federation. They however supported the idea of Slovenia leaving the federation. The assumption of Slobodan Milosevic in 1989 as president of Serbia, the largest and the most heavily populated republic in Yugoslav region brought the tension in the area to a higher level. In December 23, 1990, 88% of the voting populace in Serbia voted for independence (Spencer, Metta (1998). President Slobodan Milosevic also started his plan to unite the regions of Croatia, Bosnia and Serbia into a great Serbian republic