Q&A Hero

Q: In the year 2008, twice as much FDI invested in the United States was spent in acquiring established businesses than in setting up new ones.

Q: The International Monetary Fund and the World Bank were both created in 1944 by 44 nations that met at Bretton Woods, New Hampshire.

Q: Most of the foreign direct investment in the United States has been spent establishing new companies.

Q: The World Trade Organization, the International Monetary Fund and its sister institution the World Bank, and the United Nations were all created by voluntary agreement between individual nation-states.

Q: Historically, firms engaged in FDI have generally preferred wholly owned subsidiaries.

Q: Substantial impediments, such as barriers to foreign direct investment, make it difficult for firms to achieve the optimal dispersion of their productive activities to locations around the globe.

Q: If a firm decides to become involved in overseas manufacturing, it has two options: (1) wholly owned subsidiary and (2) joint venture.

Q: As firms follow each other around the world, they bring with them many of the assets that served them well in other national markets. Thus, greater diversity replaces uniformity.

Q: One way in which contract manufacturing is used is for a company to contract with a local manufacturer to produce products for the company, according to the company's specifications.

Q: Globalization has resulted in greater uniformity replacing diversity across national markets.

Q: One way in which contract manufacturing is used is to subcontract assembly work or the production of parts to subsidiaries overseas.

Q: As a result of globalization, companies rarely need to customize marketing strategies, product features, and operating practices in different countries.

Q: A management contract is used only by manufacturing companies to earn income by providing expertise for a fee.

Q: A company has to be the size of a multinational giant to facilitate, and benefit from, the globalization of markets.

Q: Licensing is a form of franchising.

Q: By offering the same basic product worldwide, firms help to create a global market.

Q: Piracy is an option for helping a firm to enter new markets.

Q: (p. 7) As a result of globalization, we have been moving toward a world in which national economies are relatively self-contained entities.

Q: The potential of licensing for generating income has been more limited in recent years because courts have not upheld patent infringement claims as much as they used to.

Q: Elaborate on the caste system supported by Hinduism

Q: Some firms do not grant licenses to other firms because of the fear of having a strong competitor upon the expiration of the license.

Q: The licensee generally pays a fixed sum when signing a license agreement and then royalties of 5 to 7 percent of sales over the life of the contract.

Q: What are the two different banking methods that Islamic banks have experimented with in order to avoid the payment or receipt of interest?

Q: Describe Islamic fundamentalism.

Q: Licensing refers to a contractual agreement in which the licensor grants access to its patents, trade secrets, or technology for a fee paid by the licensee.

Q: What is class-consciousness? What is its impact on businesses?

Q: Producing a factory ready to operate is similar to producing a turnkey project.

Q: How does a caste system differ from a class system?

Q: Turnkey projects export technology, management expertise, and capital equipment.

Q: "There is not a strict one-to-one correspondence between a society and a nation-state." Discuss.

Q: Trading companies are privately owned firms that develop international trade and serve as intermediaries between foreign buyers and domestic sellers, and vice versa.

Q: Gamma Gene Incorporated has sought your opinion about the overall attractiveness of various countries as potential markets and investment sites. What would you tell them?

Q: Wholesale importers are independent merchants that buy for their own account.

Q: What are the various types of risk that a could face in doing business in a particular country?

Q: The Internet has made direct exporting much easier.

Q: What are the implications of changing political economy for international business?

Q: A sales company is established to market goods or services, not to produce them.

Q: Discuss the significance of legal systems in the context of shifting toward a market-based economic system.

Q: Sales companies will import in their own name from the parent and will invoice in the currency of the parent company.

Q: When does the process of privatization fail to deliver predicted benefits? What economic conditions are required for privatization to work?

Q: A sales company is part of indirect exporting.

Q: Discuss the concept of deregulation.

Q: Direct exporting is an excellent means of getting a feel for international business without committing a great amount of human or financial resources.

Q: Discuss Samuel Huntington's idea of the new world order. What are its implications for international business?

Q: A fundamental drawback of indirect exporting is that companies must pay a commission to all of the companies that handle their exports.

Q: How does Author Francis Fukuyama's vision of the new world differ from that of the late influential political scientist Samuel Huntington?

Q: Export merchants are exporters that sell for the manufacturer but do not take ownership of the product.

Q: What are the various reasons that account for the spread of democracy?

Q: Direct exporting is simpler than indirect exporting because it requires neither special expertise nor large cash outlays.

Q: What changes have occured in the political economy of most of the world s nation-states since the late 1980s?

Q: Exporting can extend a product's life cycle by exporting to currently unserved markets where the product will be at the introduction stage of the life cycle.

Q: Do all totalitarian regimes oppose market economy and strong property rights protection? Elaborate

Q: Exports can help to offset cyclical sales in a firm's domestic market.

Q: Why are market economies more conducive to innovation and entrepreneurship than planned or mixed economies?

Q: Exporting is a way for firms to improve the efficiency of manufacturing equipment.

Q: How do the political, economic, and legal environments of a country affect international trade? And what factors make a country favorable for doing business?

Q: Exporting is an expensive option for testing foreign markets and foreign competition.

Q: Discuss the philosophy that underlies intellectual property laws.

Q: One benefit of exporting is that it can enable a company to serve markets where the company has no or limited production facilities.

Q: What are grease payments? Are they acceptable by the U.S. law and OECD convention?

Q: Entering foreign markets may be described by two levels of involvement, nonequity-and equity-based.

Q: Describe the Foreign Corrupt Practices Act.

Q: The means of supplying overseas marketsexporting to and production in those marketsdepend on nonequity modes of entry.

Q: Describe how management development programs can increase the value of human capital in an international business firm.

Q: A follower will most likely succeed when there are few legal, technological, cultural, or financial barriers to inhibit entry, as long as it has sufficient resources or competencies to overwhelm the pioneer's early advantage.

Q: How does unintentional bias affect the performance appraisal of expatriates? How can it be reduced?

Q: A pioneer will most likely succeed when there are low entry barriers and the firm has sufficient size, resources, and competencies to take advantage of its pioneering position.

Q: Briefly describe how national differences in compensation affect international business.

Q: Research shows that surviving pioneers hold a smaller average market share when their industries reach maturity than firms that were either fast followers or late entrants in the product category.

Q: Describe any two components of a typical expatriate compensation package.

Q: Some evidence suggests that pioneers gain and maintain a competitive advantage in new markets.

Q: How has organized labor responded to the increased bargaining power of multinational corporations?

Q: What are the disadvantages of joint ventures?

Q: Describe the different approaches that international businesses take to labor relations.

Q: What is contract manufacturing, and what are the ways in which international firms employ contract manufacturing?

Q: What is globalization? How do global companies such as IKEA, Starbucks, and McDonald's facilitate the creation of a global market?

Q: Briefly describe the influence of the location of research and development on new-product development.

Q: Why have more companies, at home and abroad, begun to obtain licenses instead of making illegal copies?

Q: What are the drawbacks of indirect exporting?

Q: What are the reasons that firms, both small and large, may engage in exporting?