The basic challenge to industrial geographers is to construct a general theory of the interrelationships between the behavior of industrial organizations and the dynamic spatial structures of industrial systems. Three conceptual problems associated with this research are examined in terms of the transformation of manufacturing firms from intranational companies to international enterprises. The major conclusions from the discussion are that the interrelationships between the internationalization process and the spatial form of industrial systems must be viewed as the result of the strategic choices made by management; that the initial dependent variable of the transformation process should be an index measure of the financial performance of the firm over time; and that rigorous testing of the hypotheses already formulated by industrial geographers must assume the highest priority. Following a discussion of the three issues, the conceptual design of an experimental research project now in progress is described. The project is an investigation of the strategic responses of a sample of American firms to import competition and economic decline.
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