First Test Flashcards
Joint ventures
Ownership by more than one partner; can take many configurations; need not to be 50/50 ownership; need for decentralized control
Wholly owned subsidiary
100% ownership mne; provides mne with maximum control over opns; can raise problems with host country
Strategic alliances
Partnership that may include customers, suppliers, and competitors; generally no equity ownership
Equity alliances
Partners agree to take ownership in each other companies
Licensing
Grants product rights to another company for a period of time in exchange for a royalty fee
Franchising
Licensing of trademark combined with continual assistance in business operations
Turnkey operations
Construction of operating facilities for a fee; once completed, turned over to buyer for operation
Management contract
Foreign company can manage more efficiently than host country owners, little capital outlay required, 3-5 year contract, generally fixed fee
Contract manufacturing
Firms contracts with a foreign firm to produce products to its specifications
Common law
Based on traditions, customs, and precedents resulting from court interpretations of the law
Civil law
Detailed set of codes requiring little to no court interpretation
Theocratic law
Based on a religious sacred document
Power distance
The extent to which society accepts the unequal distribution of power among themselves
Uncertainty avoidance
The extent to which society feels threatened by ambiguous situations and is reluctant to take risks
Individualism
People look out for themselves and their immediate family
