The survival of the fittest in the global markets: multinational corporation challenge, evolution and decline

Abstract

Purpose The purpose of this perspective paper is to answer the question of why some multinational corporations (MNCs) do not evolve and fail to avoid retrogression by natural selection in international business (IB) and to introduce eight papers selected for this special issue. Design/methodology/approach The authors conceptually discuss the reasons for MNC failure by illustrating key motivations behind foreign direct investment (FDI) undertaken by MNCs based on internalization theory, the OLI paradigm and the OILL (i.e. OLI plus the learning motivation) paradigm. Then, the authors develop an evolutionary perspective to explore the survival of the fittest in the global markets and the natural selection of MNCs. Findings The eight papers selected for this special issue expand the authors' understanding of globalized organizations' challenges, evolution and decline as well as offering a distinct opportunity to reconsider diverse extant theories about MNCs by suggesting an extension that accounts for the rise of various globalized organizations particularly in and from emerging markets. Originality/value Despite increased numbers of MNCs, which struggle to survive and are faced with great risk of failure, the authors' understanding of them still remains in infancy. While scholars have investigated diverse topics related to MNCs, existing studies have developed theories predominantly emphasizing MNC success. Thus, conventional theories in IB such as internalization theory and the OLI paradigm may not be sufficiently applicable to explain the phenomenon of MNC failure (i.e. MNC decline). Based on authors' discussions, the authors believe this is an appropriate time to refine mainstream IB theories by concurrently considering both evolution and retrogression.