Strategic Management: Formulation and Implementation

International Business: Terminology

As with any new discipline, a number of words are employed whose definitions vary among users. Some people use such terms as world and global interchangeably with multinational. However, international business, like every filed of study, has its own terminology. For example, William Dymsza uses the terms "international corporation" and "multinational corporation," as follow:

" An international company is one that engages in any combination of activities from exporting/importing to full-scale manufacturing in foreign countries."

" A multinational corporation, in contrast is a highly developed international company with a deep worldwide involvement, plus a global perspective in its management and decision making."

Some other researchers use the terms international business, multinational organizations, and global firms (Wright, Pringle, Kroll):

"International business are those that are minimally or moderately involved in foreign operations."

"Multinational organizations are companies that are heavily involved in overseas operations through direct investments abroad."

"Global firms are also heavily involved in foreign business and have made direct investments overseas, but their subsidiaries operate interdependently."

Each of these companies had become a large worldwide corporation by exploiting its particular strategic capability. Table 1-1 summarizes the key differences in the three strategic and organizational models.

However, governments officials in the developing nations and some international organizations call a firm operating in two or more countries as transnational.

To complete this discussion, I need to mention that the term supernational corporation was described in a publication of the United Nations as one in which both the operation and ownership are multinational.