PAPER 1 Flashcards
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Non-human person
Pressure Group
Seek to influence the decisions of a business in the interest of a particular cause.
Multinational company
A company that operates in more than one country, with the HQ in the home country, and operations in other countries.
3 reasons why MNCs would want to expand to new countries
- Access to new customers
- Lower costs of production
- Avoid import restrictions
4 positive impacts on host country after MNC moves there
- Creates more jobs in the host country
- Training opportunities for these local employees
- MNC might buy resources locally (e.g. electricity, glass, etc.)
- Boosts the economy (Higher GDP and taxes paid)
3 negative impacts on host country after MNC moves there
- Potential bankruptcy of local businesses who can’t compete
- Depletion of non-renewable sources in the host country
- Potential of negative impact on the environment
Internal Growth
This is an organic type of growth in businesses. It is when a company expands using its own resources without the involvement of other organizations.
This would be things like:
- Product Development
- Increasing sales
- Improving operational efficiency
External Growth
Inorganic growth that grows a company by involving third party organizations
Merger and Acquisitions
Occurs when one organizations buy a controlling interest in another company by purchasing enough shares to have a majority stake.
Strategic Alliance
Arrangement between two or more companies in which they join forces to undertake a project that mutually benefits all partners while letting them keep their independence.
Public Limited Company
A company that offers its shares to the general public the stock exchange. This type of company has limited liability meaning shareholders are only liable for the amount they invest.
Private Limited Company
A business owned by a relatively small number of shareholders which does not trade its shares on the public stock exchange. It also has limited liability however they cannot raise capital from the public.
