International Business And Management Of A Multinational Corporation

1866 Words8 Pages
As the threshold of conducting business in foreign country becomes lower, it has been appealing to turn a local company into a multinational corporation. By leveraging and gathering resources from global platform, company will make leaping progress not only on profit, but also on brand building. However, the moment a company begins to consider paving its way into foreign markets and goes globally, it needs to take into consideration various kinds of transaction expenditure that rose in trading. Therefore, it has been critical for company executives to understand and utilize the Transaction Cost Theory (TCT) in order to find the most suitable method for company to supervise and minimize the transaction costs. Through analysis into TCT, one can have a deep comprehension on the extension of how multinational companies depend on each other, and how to choose between centralized inner supervision (within company) and outer surveillance (market) so as to diminish transaction costs.
This paper analyzes the reasons that lead to transaction costs, what is the meaning and how to apply TCT in international business and management endeavor. Even though TCT is a renowned theory, it still needs revision and enhancement. However, scholars put widely different perspectives on to TCT theory scattering into diverse subjects, making the theory unable to receive progress as a whole.

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It is known to all that managing business globally will give rise to various
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