The Theory of Multinational Enterprises: Revisiting Eclectic Paradigm and Uppsala Model

Abstract

Globalization has been evolving through the growing trend of multinational enterprises (MNE) for a prolonged period. In this fierce competitive market, corporations are trying to spread out their operations in different geographic locations in order to gain different advantages. Based on past literatures, the goal of this paper is to explain the relevant theories of multinational enterprise through proven theories and scholars viewpoint. With the theoretical ground of ‘Uppsala model’—that explains the internationalization process and, ‘Eclectic Paradigm’—that explore the factual reasons behind internationalization, this paper would focus on the rationale and process of becoming MNE. Additionally, with many critics’ viewpoint, real life examples of successful MNEs, this paper found the foundations that embolden the new generation firms to spread its production and head office in different part of the world successfully as a process of turning into MNE.