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The early research on multinational enterprises usually relied on traditional economic theory or relatively simple, but powerful, theories developed in the field of international business. They were developed to help us understand why firms entered international markets (e.g. Dunning’s eclectic theory). However, as the field of international management (and international business) has developed further, with more scholars from adjacent disciplines conducting research on issues of importance to international markets and multinational firms, newer, more diverse and complex theoretical perspectives have been developed and diffused. The purpose of this volume is to explore some of these important and newer theoretical perspectives. For example, herein, we examine the recent theoretical work on the metanational that emphasizes knowledge-sharing among subsidiaries on a global basis. We also explore theoretical issues related to international entrepreneurship, a new, important, and growing perspective in the field of international management. Additionally, we include work focused on the liabilities of foreignness and other critical issues in the management of multinational enterprises. As such, we believe that this volume provides a basis for future research on the multinational enterprise, and we hope that the work contained herein serves as a catalyst for such research using the different theoretical perspectives examined herein.

This introductory chapter presents a personal perspective on the challenges of building a managerial theory of the multinational corporation (MNC). By managerial theory, I mean a practice theory (Van de Ven & Johnson, in press); i.e. a theory that draws upon discipline-based knowledge to show how more general abstract conceptual analysis can be brought to bear on specific real-life managerial problems (Simon, 1996). Developing such a managerial theory is fraught with challenges and pitfalls. Such a theory has to provide a conceptual link between academic disciplines (traditional science or at least academic research) and practical knowledge (learning from action). Each follows very different theory building rules (Christensen et al., 2002; Cook & Brown, 1999;Van de Ven & Johnson, in press), and yet a managerial theory needs to incorporate both. It needs to be useful in the context of an evolving phenomenon: Today’s global companies neither carry the same activities nor draw their legitimacy or competitive advantage from the same sources as yesterday’s multinationals. A theory that attempts to bring theoretical disciplines to bear on practice also needs to be multidisciplinary and eclectic. Thus, there are three challenges addressed in this chapter.

This paper analyzes five characteristics associated with the overall decision‐making process that are necessary to achieve a high degree of perceived procedural justice within four strategic contexts of focal subsidiaries. Strategic contexts are based on the role of subsidiaries as defined by the flow of knowledge between these subsidiaries and the global network of MNCs. Propositions are developed that relate the five characteristics, the four strategic contexts, and high perceived procedural justice. The propositions represent a template for managers and researchers interested in the successful implementation of global strategic decisions and the improvement of the performance of individual subsidiaries as well as the global competitiveness of multinational corporations.

The capital budgeting decision for a multinational enterprise needs to take into account concepts of business policy and competitive strategy. From the modern theory of the multinational enterprise, i.e., the theory of internalisation, it is recognised that proprietary firm specific advantages yield economic rents when exploited on a world‐wide basis. Yet the multinational enterprise finds these potential rents dissipated by internal governance costs of its organisational structure and the difficulty of timing and sustaining its foreign direct investment activities. This paper examines these issues by a focus upon parent‐subsidiary relationships and the strategic nature of the capital budgeting decision for a multinational enterprise.

Competitiveness is one of the most misunderstood concepts of the 1990s. It has drawn substantial attention from the government and business communities during the last 25 years. Morrisson et al. (1988) noted that between 1983 and 1987, the term competitiveness appeared more than 5700 times in the titles of newspapers and magazine articles. The growth of importance and interest can also be observed from the increase in the bibliographical entries in ABI/Inform database. From 1981 to 1986, the topic “international competitiveness” increased by about 26 listings per year (a total of 159 in 6 years) and the rate increased to 45 listings per year from 1987 to 1993. Academic interest in the area has also increased and as a result, new developments contemplating conceptualization and understanding of competitiveness are taking place. However, to no one's surprise, writers from different disciplines offer a variation in perspective when describing the concept, understanding, and postulation of competitiveness.

We examine the citations from four international business (IB) journals over 2000‐2004 to show the areas, the journals, and the institutions that impact IB research. The leading works that influence IB research are primarily management journals, scholarly books, and IB journals. IB research is published in non‐IB journals, as well and this has influenced the recent research in IB journals. U.S. and non‐U.S. academic institutions and non‐academic organizations are among the top 100 institutions that impact IB research, indicating that this research is a truly global endeavor. Finally, recent IB research is influenced more by recent published research than by past research. Scholarly books have become less influential, while the economics, finance, and marketing journals show no change in the influence on IB research over time.

Cross‐national strategy as opposed to country‐by‐country strategy may take place on a regional or on a global basis. This paper examines the European regional office experience of 16 large U.S. firms in terms of (1) the types of responsibilities they handle and why, (2) the problems of removing control and/or duties from country subsidiaries, and (3) the relationship between a regional and global strategy and implementation. The companies' experiences have been quite diverse, thus highlighting multiple opportunities but the need to approach the development of regional operations cautiously. In spite of some problems, the future for European regional management seems bright.