A final point may be warranted on the ‘network’ MNE or global factory (Buckley, 2011). Rugman was always keenly aware of the limits of diversification, which has a geographic dimension and a product dimension. Rugman’s recognition of flagship-based net- works, as discussed in Buckley (2016) exemplifies the limits to diversification through the ownership of economic activities. Rugman was also well known for his analysis of the limits of geographic diversification (Rugman, 2005; Rugman & Verbeke, 2004). In both cases, the normative implications are the same: owning or controlling any economic activities, in order to be successful, must be associated with FSAs, which typically have a limited deployability across product and geographic space.In Rugman’s view, the key problem with mainstream thinking on the ‘network’ multinational, is that this body of work largely neglects the costs of controlling a network of geographically dispersed economic activities that are not owned by the MNE. Foregoing ownership of such activities may solve problems in the realm of how to lower production costs, or how to be flexible in terms of shifting production locations, or how to stay away from technology choices in peripheral areas of economic activity, etc. However, absence of requisite FSAs to perform particular activities ‘in-house’, thus resulting in ‘outsourcing’ and the presence of a ‘network’, does not guarantee success, i.e., a smiling curve. A smiling curve will only materialize in the presence of FSAs in network governance.