Principles of Management Ch 8

corporations that own businesses in two or more countries.

a company builds a new business or buys an existing business in a foreign country

direct tax on imported goods

quotas, voluntary export restraints, government import standards, subsidies, customs classification

when a multinational company has offices, manufacturing plants, and distribution facilities in different countries and runs them all using t

when a multinational company modifies its rules, guidelines, policies, and procedures to adapt to differences in foreign customers, governme

Selling domestically made products to foreign markets

a domestic company, the licensor, receives royalty payments for allowing another company, the licensee, to produce its product, sell its ser

companies earn money without investing more money companies can avoid trade barriers

licensor gives up control over product quality licensees can become competitors

a collection of networked firms in which the manufacturer or marketer of a product or service, the franchisor, licenses the entire business

fast way to enter foreign markets gives franchisor additional cash flow

loss of control culture bound

When companies combine key resources, costs, risks, technology, and people. Most common form is joint ventures.

companies avoid trade barriers companies only bear part of the costs partners can learn from each other

profits have to be shared merging of cultures

Foreign offices, facilities, and manufacturing plants that are 100 percent owned by the parent company

parent company receives all of the profits and has complete control

losses for parent company can be enormous

compare the relative cost of a standard set of goods and services in different countries

the number and quality of companies that already compete in foreign markets

the risk of major changes in political regimes that can result from war, revolution, death of political leaders, social unrest, or other inf

the risk associated with changes in laws and government policies that directly affect the way foreign companies conduct business

divesting or selling business to avoid risk

active strategy to prevent or reduce political risks

using joint ventures and collaborative contracts