ABSTRACT
A significant trend in the last 50 years has been the globalization of the economic environment. This means that goods and services are increasingly being produced and sold across national economic boundaries. This chapter investigates the rise of globalization and the multinational enterprise (MNE) and analyses the motives for multinational operations as well as the effects of MNEs on consumers, parent countries and host countries. It also considers the relationship between MNEs and governments in parent and host economies. The significance of MNEs cannot be underestimated since it has been estimated that the 200 largest MNEs have a combined sale equal to about one-third of the world’s GDP. This chapter enables the reader to:
explain the meaning of globalization
explain the meaning of an MNE
understand the motives for extending operations overseas
analyse the effects of MNEs
evaluate government policy relating to MNEs.
