Finally, firms tend to become multinational by establishing an “Internet Encarta”. As Quelch and Klein argue: “any company that establishes a site on the Internet, automatically becomes a Multinational corporation:”.

Conclusion:

To conclude, economic globalization is a thriving phenomenon of the past century and has greatly influenced the world’s economy. Indeed, an aspect of economic globalization is the development of firms into multinational companies.

Nowadays, it has been observed that more and more companies aim in exporting their products and augmenting their costumer database. Either by establishing an Internet Encarta or franchising, firms aim to increase their profits while at the same time they contribute in the construction of a global marketplace and the increase of the world’s GDP.

Also, firms that become multinational, increase the global sales and the size of the market. As a result, customers around the world have a greater variety of products to chose from and therefore, increase any firms’ income.

Furthermore, cheap labour and cheap raw materials attract the owners of firms since they lead to reduce unit costs, which again results into an overall profit of the specific firm.

Moreover, the production increases and becomes more efficient since firms start getting involved with a group of more “technologically developed” companies, when cooperating with multinational companies.

The multinalization of firms may seem superficial by means of cultural or social aspects, but in fact, it is not. As Drucker mentions, we live in a world of “Social Transformation”; making firms multinational directly involves integration of countries, cultures and civilizations. Therefore, the multinationalization of firms, contributes in the coalition of countries, cultures, habits and people to result into a global and unified community. Therefore, economic globalization not only serves social purposes but also economic ones. It is the main and mos