MNC Questions and Answers

MNC Questions and Answers Liability 3rd party is affected by joint ventures, all parties involved in the joint venture are equally liable Rights of a Joint Venturer -Equal control, influence and power over the project or transaction. Contract can give one party complete contract, equal ownership of product Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:04 / 0:15 Full screen Brainpower Read More Multinational corporation Has facilities and other assets in at least one country other than its home. Such companies have offices and or factories in different countries and usually have a a centralized head office where they coordinate global management. Very large MNC's have budgets that exceed those of many small countries Exchange rates The value of ones country's currency in relation to another currency Global financial markets Debt and equity markets throughout the world where money is raised to finance business and governmental projects. The worldwide marketplace in which buyers and sellers trade financial assets, such as stock, bonds, currencies, commodities, & derivatives, across national borders Central banking policy Actions of the federal reserve or central bank of a country. Set monetary and fiscal policy. Manages a states currency, money supply, and interest rates. Usually oversee the commercial banking system of their respective countries What does a licensor gain? Royalty or profits International trade policy A gov policy governing economic transactions (exchange of capital, goods & services) across international borders. In many countries may make up large part of gdp. Includes taxes imposed on imports, exports, inspection regulations, tariffs and quotas Balance of payments The difference between the amount of money the government pays to other countries and amount it receive from them. Helps economists and analysts understand the strength of a country's economy in comparison to others Turn-Key Operation A company buys and sells a business another country, sells to local client. Ex: Houses, Factories, Storefronts, Churches Strategic Alliance Partnerships in which two or more companies work together to achieve objectives. Companies share resources, info and capabilities Strategic Alliance is usually a cooperative agreement between competitors from different countries Strategic Alliances are created for short-term duration, non-equity based agreement companies are separated Advantages: set market-value, tech exchange, economies Disadvantages: Not as profitable, diff to find good partner, risk of unequal partnership Wholly Owned Subsidiary Company that is publicly traded own 1/2 of stock owned by another company. Characteristics of MNCs Large size (many assets), worldwide (more than 1 country), ownership & control (ownership remains on both parent and host county), productive organization (produces various types of goods), transfer of technology (latest and advanced), marketing superiority, high efficiency