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398 multinational firm
dimensional scaling technique and its statistical
properties.)
Moscardo, G., and Pearce, P.L. �1986) `Visitor
centres and environmental interpretations: an
exploration of the relationships among visitor
enjoyment, understanding and mindfulness',
Journal of Environmental Psychology 6: 89±108.
�Discusses an example of the use of MDS in
clustering visitor centres.)
JIANN-MIN JENG, USA
DANIEL FESENMAIER, USA
multidisciplinary education research see
education, multidisciplinary
multinational firm
A multinational firm, also known as a multinational
corporation �MNC), can be defined as a
corporation which has expanded its business�es)
internationally. Such firms generally have subsidiaries
strategically located around the world in areas
where their businesses are concentrated. In the past
decades, hospitality firms enjoyed tremendous
growth opportunities and profitability. However, as
the external environment moved from relatively
stable to one that is increasingly changing at a
faster pace, the industry operators realised that
they no longer can manage their businesses the way
they used to. By the late 1980s the domestic
hospitality or tourism market showed signs of
saturation. The demand curve for its products/
services began to level off.
The hospitality industry in general is in the
maturity stage of its life cycle and is experiencing
limited growth domestically. Competition has
become fierce, suppliers and customers have been
gaining power, and the supply of labour has been
low. Thus, many firms are seeking viable ways to
survive the economic hardship that they are facing.
As a result, the industry has turned to global
expansion and thus the emergence of multinational
firms as a means of continual growth and survival.
Just as there are opportunities that arise from the
global community, there are also new sets of
challenges facing tourism executives. It is a
considerable task for any given organisation to
function effectively in the domestic market given
today's dynamic environment. It will be more of a
challenge for a MNC to compete successfully in the
international markets as it faces a complex set of
environmental conditions. Thus, it is imperative
that multinational firms weigh the costs and
benefits of expanding their businesses to certain
countries due to the high level of risks the firm
could face. Some of the benefits that tourism
multinational firms enjoy are potential market
share, continual growth in profit and return on
investment. Some of the costs that multinational
firms face are training costs of unskilled labour,
global customer acceptance of the product and/
or service, increased risks due to political unrest,
availability of qualified management, and a host
country that has the infrastructure for tourism
development.
See also: economies of scale; joint venture; risk
Further reading
Jones, P. and Pizam, A. �1993) The International
Hospitality Industry, New York: Wiley. �Discusses
prevalent issues occurring at the international
level of the hospitality industry and gives
examples of multinational firms and their
operating environments.)
multiplier effect
ELIZA CHING-YICK TSE, CHINA
Multiplier effects refer to an economic concept that
was conceived in the nineteenth century and
developed throughout the early period of the
twentieth century, but not formalised until the
work of John Maynard Keynes in the 1930s. The
concept is now universally accepted amongst
economists and applies to changes in exogenous
demand for any industry's output, and is thus not
solely related to tourism activity. Within the context
of tourism multiplier effects are those economic
impacts brought about by a change in the level or
pattern of tourism expenditure. The term `multiplier'
is derived from the fact that the value of
expenditure is multiplied by some estimated factor