International management

Question 1

What is the main scope of IM, Abbreviations

Answer 1

MNC - Multinational corporations
MNE - Multinational enterprises

Question 2

What is FDI and give an example

Answer 2

Foreign direct investments:
Setting up foreign manufacturing facilities, assemblies or other factories

Question 3

Name some current trends in FDI

Answer 3

Decline in FDI despite GDP and trade Growth
Less FDI to the least developed countries
Low rates of return

Question 4

Forces affecting growth of international business

Answer 4

1. Overall macroeconomic conditions
2. Degree of receptivity to foreign companies
3. Degree of capital liberalization
4. Trade protectionism
5. Transport and communication strategies

Question 5

Why do we pursue international strategies

Answer 5

Higher margins,
More of the global market, Get closer to the supply source,
Lower costs and better value factors of production.
Confront international competitiors,

Question 6

What are some political risks of internationalization

Answer 6

Terrorism, discriminatory treatment, dishonesty by government officals.

Question 7

Decribe Product life cycle theory

Answer 7

Introduction - starts in developed countries with new products or services
Growth - Copy and produced elsewere imported to home country
Maturity - low cost production wins the market and controls product.
Decline - Poor countries is the only market left.

Question 8

Internalization theory

Answer 8

Firms appear where it is cheaper to allocate international resources internally rather then to use the market to do so.

Question 9

Uppsala model.
Internationalization through stages and expanding.

Answer 9

1. Establish a domestic market
2. Entrepreneur to foreign market through an agent
3. Establish a subsidiary which deals with customers
4. Production overseas through subsidiary operation

Question 10

Different types of distances

Answer 10

Cultural
Adminstrative
Geographic
Economic