Business Questions Chapter almost eight

 Business Questions Chapter eight Essay

п»їReview Queries for Last Exam Nov 2013

1 . Go over why much of the recent increase in FDI has been driven by dramatic politics and economical changes that have been occurring in many of the planet's developing nations around the world. a. These types of countries are now open to FDI and businesses in spots that are developed want to go to places persons don't have many products or as much of the product they sell.

2 . Transferring is a stunning option for items that have a decreased value-to-weight percentage. Explain so why it is or it is not the case. a. They will cost more to send then you will get in revenue. In favor of less weight and even more value. This is why the export pieces of items instead of the whole thing.

3. Irrespective of its advantages, FDI have been described as a great " expensive" and " risky" international growth approach. Other things getting equal, why is FDI high-priced and risky? Compare the potential risks involved with FDI to the dangers involved with exporting and licensing. a. The organization is purchasing a country it does not have secure political, legal, and monetary systems. If your investment is definitely confiscated and also you would not get paid. Ex. Uganda. It can be costly because of the expense of expatriates. And what happens if you can't work the local people or look for a local workforce. Pricy to expand business to another country

5. Name 3 reasons that licensing will not be an attractive choice. a. Foreign trade – people who manuf. a whole lot in their own country, financial systems of level – even more you produce the fewer it expense per item, reach a vital mass since you have enough storage pertaining to the resources you don't have b. Licensing- you have the know-how, you can find something that has already been established (you don't have control over manuf, and you will be impersonated.

5. Justify the following assertion: " Governments are the key source of impediments to the free of charge flow of goods between nations around the world. " a. They can set up tariff, financial assistance, quotas, regulations that minimize products being released in. laws and regulations that are imposed on the company like a local labor force quota! Tax on overseas money. Guard their foreign markets! However they do problems for the population. Over pay for items.

6. FDIs can be a advantage to the origin country and also to the web host country. Make clear. a. Origin country- balance-of-payments, employment results, and important skills n. Host country- resource-transfer effects, employment effects, balance-of-payments, and effects on competition (consumer choice) and economic progress (innovation and productivity growth)

7. International management abilities acquired through FDI may produce essential benefits intended for the number country. Explain and illustrate through cases a. McDonald's – training employees

n. When you do guard licensing and training you receive everything that american company can give c. That they learn more and acquiring more skills

d. Change in sexuality dynamics

8. Why do many host governments get worried that FDI may be combined with some loss of economic independence? a. They will don't want to lose control of management models and their culture. Afraid of loss of identity, traditions and control over their human population. Don't want a contract to override their particular culture. Don't want to become dependent on that FDI. They wish to keep majority in their firm. They are in-turn connected when one nation is in period if crisis so may be the other. The don't develop their marketplaces by themselves! They will kill community businesses.

9. How does any host government's attitude toward FDI affect a industry’s willingness to interact in FDI in that country? a. A business will not choose a economy that may be going the dislike all of them. Should a number government's attitude toward FDI be a major consideration when creating a FDI decision? Of course , the political, legal, and economic factors are important. The us government has so much interaction.

15. Why with no foreign exchange market, international operate and intercontinental investment on the scale that people see today would be extremely hard? a. Aren't...

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