Economic Analysis Of The Impact Of Informationalization Oll-outs In Multi-National Companies

To sustain advantage in the forefront of ever-changing market and excess production capacities, Multi-National Companies (MNCs) need to speed up infomationization construction so as to optimize operational process and integrate resources. As Infomationization can significantly alleviate information asymmetry, lower both agency cost and transaction cost, and greatly improve corporate productivity, MNCs place great emphasis on the implementation of Infomationization, and some even view it as a task of strategic importance.This paper presents a theoretical analysis of MNCs Infomationization within economic framework. Beginning with basic concepts of infomationization, this thesis uses graphs and models to explore fundamental reasons leading to Infomationization implementation in MNCs, i.e. enhancement of international competitive strength, transnational management, real time surveillance and integration of supply chain, among others. From these perspectives, Infomationization of MNCs can be thought as a result of combination of both internal and external incentives.This paper has also developed models for evaluating cost and benefit of Infomationization and thus have provided MNCs guideline for making infomationization decision.In the final section, based upon market value theory,principal-agent theory and Cobb-Douglas Function, the thesis develops models and demonstrates the economic effect of Infomationization on MNCs, namely lowering cost and increasing the competitive competence. It concludes that due to current and potential economic impacts mentioned above, Infomationization has become trend of the times.