During the past 20 years, the structure of the global economy has been changing. BRIC countries, namely, Brazil, Russia, India and China, have emerged as fast growing and competitive economies in the world. It is true that global economy is still dominated by a large number of multinational corporations (MNCs) from the Western countries. At the same time, a number of companies from the developing economies have also entered the global market. About 30 years ago, the world's greatest automobile manufacturers were General Motors, Ford and Chrysler. Today, companies such as Toyota, Honda, BMW, Volkswagen and Hyundai, among others, stand out as competitive enterprises in the global automobile market.During the global slowdown of 2008–09, Volkswagen and Hyundai were growing in the shrinking world economy. Even in the manufacture of personal computers, earlier dominated by US MNCs, Lenovo, a Chinese company, has emerged as a big player challenging the world's top players Dell and HP-Compaq. Generally, countries do not compete with each other, but enterprises established and grown in the specific socio-political economic environment of a country compete with the companies of other countries. In the nineteenth and twentieth centuries, the enterprises established in Western countries and the United States started operating in large number of countries as MNCs and started dominating global production, assets and trade. Japanese enterprises also started growing big and emerged as MNCs in the later half of the twentieth century. During the last two decades, the enterprises of the developing countries have also started internationalizing their activities and have become multinational enterprises, for example, Tata Motors and Tata Steel. Many Indian enterprises are still growing and acquiring companies (see the case of Apollo Tyre in Exhibit 3.1). Why do enterprises decide to internationalize their activities to become multinational companies?
