This article proposes that the oligopoly power and internalization models of the multinational enterprise should be reviewed in light of the newly developing resource-based model of strategy and managerial decision-making models of strategic management. The perspective described here suggests that strategy-making under conditions of uncertainty and the drive to gain competitive advantage from deployment of firm-specific resources are important issues in the internalization decision of the MNE in a host market. The role of transaction cost efficiency in generating subsidiary governance structures is redefined to be compatible with the demands of these additional considerations of the multinational strategic manager.