International versus Domestic Management

Introduction

Today’s globalize economy rose out of the previous international trading system, As the world economy developed, it moved through different phases, progressing from a trading economy based upon exporting in the 19th century towards a economy that made it easy for companies to setup operations in many countries. At each turn of the economic development, the type of companies that dominated the scene changed. Earlier, it was the international trading firms that dominated. Then we saw the rise of the exporters, eventually evolving to the multinational firms of the 1960s and 1970s, which dotted the world map with plants. With the emerging global imperative fueled by the liberalization of the world economy in the 1980s, the dominating organizational paradigm changed from the multinational to the global firm.
The globalizing economy has had a tremendous influence on firms, forcing them to adapt to new realities. Expanded competition meant that firms would be able to enter ...