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Organization of International Business
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This text examines the internalization theory of the firm which encompasses inter-firm networking as well as the internal organization and managerial structure of the firm. The key innovation is the concept of information costs - distinguished as the cost of gathering information on the assumption that it is true and the cost of ensuring that it is actually true - which the author explores through a synthesis of transaction cost analysis and organizational behaviour. A rational, profit-maximising multinational will economize on collecting information and trust, both across society and within organizations. Although this text focuses on international business and multinational enterprizes, the analysis can be applied to a wide variety of business units. Together with its companion volume "Entrepreneurship and Business Culture", it offers an analysis of the importance of trust in economic life as well as the related concepts of networking, consultation and empowerment.
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