Internalization theory and its impact on the field of international business

Internalization theory explains the existence and functioning of the multinational enterprise. It contributes to understanding the boundaries of the multinational enterprise, its interface with the external environment and its internal organizational design. Much work in the international strategic-management sphere has unfortunately not taken on board internalization-theory thinking and lacks the insights provided by this comparative institutional approach. In this chapter, we show how well-known international strategic-management models could be enriched and their normative implications altered by adopting an internalizing-theory lens.