Why do firms enter the foreign market as multinationals rather than adopting other modes of entry?

Entering the foreign market as multinationals enables the firm to control the firm branches easily. Multinational firms operate in many countries, but the central office management controls all the branches. It is easy for the management to control the firm's branches since all the branches are controlled by single management at the central office; thus, making decision making easier. Also, any policy implemented by the firm works for its branches; thus, the firm does not need to make policies for each branch alone; hence, making management more effortless.

Also, entering a market as a multinational firm helps reduce the management cost. This is because the firm will have single management in its headquarters and representatives in the branches, who will be receiving management decisions and overseeing the operations on behalf of the management. Hence, there will be no need for full management executives in every branch, thus reducing management's cost.