Globalization : Multinational Corporations ( Mncs )

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Globalization As globalization continues to advance throughout the world, multinational corporations (MNCs) are reaping the multitude of benefits operating within the international marketplace entails, as well as attempting to curtail the associated risks. Developments such as the immediate transfer of information/currency has led to a great amount of internationalization and interdependence within the global landscape (Shapiro, 2014; Cho & Lee, 2004). As a result, MNCs are able to penetrate markets, in an attempt to minimize costs, acquire materials, pursue knowledge, and take advantage of inadequacies within the financial market (Shapiro, 2014; Harrison & Elaydi, 2014). Additionally, there are numerous advantages and risks that can be stifled when a domestic firm transitions into the global marketplace. However, despite their efforts and due to their enormous impact, MNCs continue to be susceptible to their own total risk (systematic and unsystematic) in addition to specific financial, economic, and political risks within their operating countries (Shapiro, 2014; Tan & Wang, 2011). Therefore, the ensuing paragraphs detail the motivations behind international expansions, possible threats that can be evaded, and unavoidable risks. As Shapiro (2014) notes, due to internationalization and sheer amount of global consumers, foreign markets have generated the majority of sales for many U.S. MNCs compared to their domestic revenue. Stimulated by less trade barriers and
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