Exam 9: Corruption and Ethics in Global Business

An agreement between two or more firms that do not involve the creation of a separate entity with joint ownership and in which the firms stand to gain revenues and maximize profits through cooperation for a given period of time is called a(n)_____.

Trade barriers lead to decreased competition from abroad,and raise prices and profits of domestic firms.Interestingly,such protection over time will often lead to higher-quality domestic products and services.

McDonald's,Burger King,and Subway are all examples of businesses that operate as ______.

_______ refers to the practice in which a company or individual provides the foreign partner with the technology to manufacture and sell products or services in a target country for an annual fee.

Which industry is especially well-known for franchising?

New facilities built and operated overseas that require large investment of capital to tailor to the exact needs of the home country firm refers to _____.

A fundamental consideration that must be made in business is the risk-return trade-off.In general,the greater the risk (loss of capital invested)entrepreneurs are willing to take,the greater the rewards (profit)they are likely to reap.

A relatively low-risk business operation that involves penetrating foreign markets (by exporting)or importing merchandise at competitive prices for domestic consumption refers to _______.

______ refers to the potential financial loss that entrepreneurs are willing to take in a business.

Scenario - Lewis Fabrication Lewis Fabrication was founded in 2001 and is based in Maryland,USA.This company manufactures custom designed motorcycle parts and currently has over two thousand U.S.customers.Due to the growing number of inquiries received from foreign countries such as Japan,Canada,China,and Indonesia,Lewis Fabrication has decided to begin operations on a global scale.The owners realize there is much to learn before undertaking this monumental step.However,financial projections indicate about $1 million in profit is very likely in the first year of going global.The owners are very excited and looking forward to the business expansion. -The global markets in which Lewis Fabrication plans to expand provides this company with the opportunity for entering relatively high-growth markets with a product that is in demand.Which one of the following would Lewis Fabrication be least likely to expect to find in this type of market?

Mexico consistently has been the world's largest recipient of FDI capital in the world averaging some $200 billion a year in net FDI inflows since 2005.Mexico has been made more globally competitive as a consequence of such FDI flows.

A new facility built and operated overseas that requires large investments of capital is an example of a _____.

The Coca-Cola company has operations in more than 140 countries and generates more that 55 percent of its profits from its overseas operations.Coca-Cola's annual profits are,therefore,more stable than those of a firm that focuses upon the U.S.market alone.Coca-Cola is engaging in _____.

An ______ is a business that is jointly owned and operated by two or more firms that pool their resources to penetrate host country markets,generate and split profits,and share commercial risk.

When MNEs go abroad,they generally do so for two major reasons.There could be massive competition in the home market or firms may genuinely identify new business opportunities abroad based upon the company's competitive advantage in production,technology and management.

An agreement between two or more firms that do not involve the creation of a separate entity with joint ownership and in which the firms stand to gain revenues and maximize profits through cooperation for a given period of time refers to _______.

Who identified three key economic "advantages" that firms should have for FDI to occur?

Which of the following is NOT true about franchising?

Of the following,which is NOT true of mergers and acquisitions?

The purchase of established firms abroad with the goal of using the existing production,marketing,and distribution networks and of having instant access to foreign markets that fit the purchasing firm's global strategy is known as a(n)_____.