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Cob 300 Management Ch 8 Exam Questions and Answers
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Cob 300 Management Ch 8 Exam Questions and Answers
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Cob 300 Management Ch 8 ExamQuestions and Answers
Global Business - Answers -the buying and selling of goods and services by people
from different countries
Pro Factors of Global Business - Answers -Low prices for good and services
Economic growth stimulation
Increase in consumer income
Creates jobs
Countries specialize in production of goods and services that are produced most
efficiently
Disadvantages of Global Business - Answers -Destroys manufacturing jobs in wealthy,
advanced countries
Wage rates of unskilled workers in advanced countries decline
Companies move to countries with fewer labor and environment regulations
Loss of sovereignty
Exploitation
Multinational Corporations - Answers -a corporation that owns businesses in two or
more countries
Direct Foreign Investment - Answers -occurs when a company builds a new business or
buys an existing business in a foreign country (or buys +10% of shares)
Global Consistency - Answers -when a multinational company has offices/plans in
different countries and uses the same rules, guidelines, policies, and procedures (if
companies lean too much toward this, they run the risk of using management
procedures poorly suited to particular countries markets, cultures, and employees (i.e.
lack of local adaption))
Local Adaption - Answers -when a multinational company modifies its rules, guidelines,
polices, and procedures to adapt to differences in customers, government, and
regulatory agencies
Ex: a mix of consistency and adaption (American idol in Dutch is called pop idol
superstar)
Exporting - Answers -selling domestically produced products to customers in foreign
countries
, Exporting Advantages - Answers -Less dependence on home market sales
Greater degree of control over research, design, and production decisions
Exporting Disadvantages - Answers -Many exports are subject to tariff and nontariff
barriers
Transportation costs can increase price
Companies may depend on foreign importers for production distribution
Cooperative Contract - Answers -an agreement in which a foreign business owner pays
a company a fee for the right to conduct that business in his or her country (2 kinds:
Licensing and Franchising)
Licensing - Answers -a domestic company receives royalty payments for allowing
another company to produce its product, sell a service, or use its brand name in a
specified foreign market
Licensing Advantages - Answers -Allows companies to earn profits without investing
more money
The licensor invests in production, equipment, and facilities
Helps companies avoid tariff and non-tariff barriers
Licensing Disadvantages - Answers -Licensor gives up control over quality of the
product or service sold by the foreign licensee (and licensor may be cheated or not paid
at all)
Franchising - Answers -a collection of networked firms in which the manufacturer or
marketer of a product / service licenses the entire business to another person or
organizations
Franchising Advantages - Answers -Faster way to enter foreign markets
Good strategy when a company's domestic sales have slowed
Franchising Disadvantages - Answers -Franchisors face a loss of control (sanitation
etc.)
Franchising success may be culture0bound
Expensive
Strategic Alliance - Answers -an agreement in which companies combine key
resources, costs, risk, technology, and people (most common type is joint venture)
Joint Venture - Answers -a strategic alliance in which two existing companies
collaborate to form a third, independent company
Joint Venture advantages - Answers -Help companies avoid tariff and nontariff barriers
to entry
Participating companies bear only part of the costs and risks
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