Many executives are choosing to internationalize operations to avail the corporation of larger and more fruitful markets, competition among labor forces, and economical location and distribution incentives. With internationalization comes geographical dispersion, increased industrial and market competition, and increased access to labor pools and natural resources. However, it also brings variations in the technical, legal, economic, and cultural forces affecting the operations and decision making of the enterprise, the impact of which is affected by the form of internationalization.

Transnational corporations can take on a variety of forms. For example, it is possible that offices in the various countries produce different products and are essentially separate. On the other hand, it is possible that the products are manufactured or created in one country and marketed in another. Or there can be some combination of the two, such as what Dyment (1987, p. 22) described:

The global corporation may have a product that was designed in a European country, with components manufactured in Taiwan and Korea. It may be assembled in Canada and sold as a standard model in Brazil, and as a model fully loaded with options, in the United States. Transfer pricing of the components and assembled product may be determined with an eye to minimizing tax legality. Freight and insurance may be contracted for relet through a Swiss subsidiary, which earns ...

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