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A multinational company is mainly based in
one country nevertheless operates in various countries, having a centralized
head office where they coordinate global management.

Economists argue that a corporation only
becomes multinational when there headquarter
is effectively owned by nationals of two or more countries; such as Unilever,
it is controlled by British and Dutch interests. If we consider it by the
ownership, of the multinational company’s there would
be a few. However, not all economists agree on this definition. others argue that
managers must be from a different country for multinational company. Some focus
on the host country and while others can be focused on the home country of the
Multinational company. Maximizing profit on a global scale while adapting to local markets,
is a common goal between successful multinationals. This essay will unveil various
reasons of why firms are motivated to internationalize.

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The reasons why firms
want to become multinational enterprises are because they benefit from market opportunities,
Risk diversification, Economies of scale.


Firms desire to broaden
their market opportunities as they exist abroad, as they want to become a
multinational. As these opportunities include demand for the firm’s products
and services in foreign market, as there could be lack of competition, giving the
firm advantage. Firms always want to grow from small to a multinational company
to make deals in the international market. For example, Sony was founded in
1964 in Toyo. It started as an electronics company in 1964; and now it is a
multinational company. Akio Morita, the owner decided that Sony doesn’t have to
engage only in the local market, therefore he seek to internationalize and viewed
the entire world as potential marketplace. Sony now provides electronics, gaming,
entertainment and financial services and engages in international markets almost
in every continent



The willingness of
company to expand on an international scale to diversify the risk made by the
company, as one market maybe dropping in one country, other countries could be
thriving. As a result, they would be able to survive when consumers change
their buying habits in each market, and also less affected by external factors
such as climate affecting consumer purchasing habits.

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