Raymond Vernon is Director of the Center for International Affairs and Herbert F. Johnson Professor of International Business Management at Harvard. He is the author of Sovereignty at Bay: The Multinational Spread of U.S. Enterprises and other works. This article is adapted from the final chapter of his book, Storm over the Multinationals: The Real Issues, to be published by the Harvard University Press in the late spring of 1977. The key generalizations in this article rest mainly on research that is presented in that book. Copyright(c) 1977 by The President and Fellows of Harvard University.
Just a few years ago, multinational enterprises were busily and profitably occupied in spreading their subsidiaries across the globe. Today, the world is awash with actions and proposals that would restrain the multinational enterprise and would alter its relations to nation-states.
There is no lack of explanations for the shift in mood and direction. Yet most explanations seem to ignore the real causes of the tension between multinational enterprises and nation-states, and most of the prescriptions seem impractical or irrelevant in dealing with those causes.
What are the roots of the tension between the enterprises and the states? Perhaps the
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