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The Multinational Enterprise

Theory and History

Mark Casson

This book summarises Mark Casson’s recent research on the multinational enterprise. This work is firmly rooted in history and examines the evolution of the internalisation theory of the multinational enterprise over the past forty years and, in the light of this, considers its potential for further development. The book also explores internationalisation theory in respect to marketing and brands, the supply chain, risk management as well as methodology.
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Chapter 10: Alan Rugman’s methodology

Mark Casson

Extract

This chapter argues that the intellectual contribution of Alan Rugman reflects his distinctive research methodology. Alan Rugman trained as an economist, and relied heavily on economic principles throughout his work. He believed that one good theory was sufficient for international business (IB) studies, and that theory, he maintained, was internalization theory. He rejected theoretical pluralism, and believed that IB suffered from a surfeit of theories. Alan was a positivist. The test of a good theory was that it led to clear predictions that were corroborated by empirical evidence. Many IB theories, Alan believed, were weak; their proliferation sowed confusion and they needed to be refuted. Alan’s interpretation of internalization was, however, unconventional in some respects. He played down the trade-offs presented in Coase’s original work, and substituted heuristics in their place. Instead of analysing internalization as a context-specific choice between alternative contractual arrangements, he presented it as a strategic imperative for firms possessing strong knowledge advantages. His heuristics did not apply to every possible case, but in Alan’s view they applied in the great majority of cases and were therefore a basis for management action.

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