According to Needle (2010), Multinational enterprises are those enterprises which carry its production activities in more than one country. These companies make sure of the supply of raw material to the other country they are operating in. As per Buckley and Casson (2009) many of the multinational operate in different country because of many reasons such as low labour costs, serving a huge market, cutting of their taxes and production costs, innovation in technology and exploitation of resources.

According to Dickens (2011), today we are living in borderless world as there are no boundaries that exist between the countries or nations. Globalisation is the new trend changing the political and cultural order of the world (Buckley and Ghauri,2004). Every operation that has been carried out by companies goes around the world. Innovation is growing very fast and so do competitiveness.

Globalisation can be define as “the increase in the frequency and duration of linkages between countries leading to similarities in activities of individuals, practices of companies, and policies of governments” (Czinkota 2005). From the statement we can say that companies go global because of many reasons as now the countries are linking to each other to share the information and wealth.

As said by Rugman and Verbeke (2005), Firms become multinational because they want to grow, expand and diversify their operations. Operating in their home country won’t satisfy them so they go global. Using the resources of their home country make it obsolete or bound them in a limit to not to go further. Then firm decides to go global by making investment on their further growth.

As argued by Madura (2008) following are the theories which a firm follows when it globalises such as:

• Theory of Comparative Advantage
• The Imperfect Markets Theory
• The Product Cycle Theory