Why Are Global Firms Really?

887 WordsNov 8, 20144 Pages
Over the last few decades there has been a substantial amount of attention being diverted towards born global firms who unlike ordinary firms, have defied the traditional stage wise process of internationalization. These firms have long puzzled researchers and challenged the basic perception of internationalization. As a result it has given way to a new field of research and aroused global interest in the emergence and success of these firms. Before going into any further detail its important to understand what born global firms really are. They are defined as “a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries”. A more detailed definition defines born global firms as “companies who have reached a share of foreign sales of at least 25 per cent within a time frame of two to three years after their establishment”. The term “born global” was first coined together by Michael Rennie (1993) who undertook a study on firms who were capable of managing and co-ordinating resources beyond national borders and competing globally. This essay will go on explain why born global firms emerge, the factors that influence them and examples of born global firms in the real world. The Uppsala theory and Buckley and Casson’s theory of internationalization of MNE’S are used to further analyze this essay. According to the Uppsala’s theory of internationalization most organizations
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