AGB 302 EXAM ASU EXAM
QUESTIONS AND ANSWERS
ethics - ANS-the principles of right and wrong that guide an individual in making
decisions
ethical strategy - ANS-a course of action that does not violate a company's business
ethics
Friedman Doctrine - ANS-the only social responsibility of business is to increase profits,
so long as the company stays within the rules of law
Culturual Relativism - ANS-belief that cultures should be judged by their own standards
flow of fdi - ANS-the amount of FDI undertaken over a given time period
stock of fdi - ANS-the total accumulated value of foreign-owned assets at a given time
has fdi increased or decreased - ANS-increased
why has FDI grown so rapidly - ANS--circumventing trade barriers
-changes to democracies
-globalization
fdi targeted: - ANS-developing countries and the US
internalization theory - ANS-why firms prefer fdi to licencing
Why do firms shy away from licensing? - ANS--gives away valueable knowledge
-doesn't provide tight control
forms of FDI - ANS--A greenfield investment - the establishment of a wholly new
operation in a foreign country
-Acquisition or merging with an existing firm in the foreign country
when exporting profit decreases what happens to FDI - ANS-increases as an alternate
to exporting
Multipoint Competition - ANS-arises when two or more enterprises encounter each
other in different markets and imitate each other
, location-specific advantages - ANS-arise from using resource endowments or assets
that are tied to a particular location and that a firm combines with its assets (human and
natural resources) (Dunning)
silicon valley is an example of: - ANS-location-specific advantages (tech business)
radical view - ANS--marxism
-imperialist domination
-home countries abuse host
free market view - ANS--adam smith and ricardo
-THEORY OF COMPETITIVE ADVANTAGE
-increased world efficiency
-lower cost
pragmatic nationalism - ANS--ups and downs to fdi
-profits go back to foreign country
-its ok if costs outweigh the benefits
host-country benefits of fdi (4) - ANS-1. Resource Transfer Effects (ease of
manufacturing)
2. Employment Effects
3. Balance-of-Payments Effects (a desire to stay in a surplus of exports)
4. Effect on Competition and Economic Growth
host country costs of fdi (3) - ANS--adverse effects on competition
-adverse effects on the balance of payments
-national sovereignty and autonomy risks
home country costs of fdi (3) - ANS--capital outflow
-exporting jobs abroad
home country benefits of fdi (3) - ANS--Positive balance-of-payments effects
-Positive employment effects
-Reverse resource-transfer effect
knickerbocker's theory - ANS-imitative behavior
market maker - ANS-connects investors and borrowers
hedge fund - ANS-private investment funds making long bets on increase in value and
short bets on decrease in value
global equity/capital market - ANS--Attract capital from international investors
-List their stock on multiple exchanges
-Raise funds by issuing debt or equity around the world
QUESTIONS AND ANSWERS
ethics - ANS-the principles of right and wrong that guide an individual in making
decisions
ethical strategy - ANS-a course of action that does not violate a company's business
ethics
Friedman Doctrine - ANS-the only social responsibility of business is to increase profits,
so long as the company stays within the rules of law
Culturual Relativism - ANS-belief that cultures should be judged by their own standards
flow of fdi - ANS-the amount of FDI undertaken over a given time period
stock of fdi - ANS-the total accumulated value of foreign-owned assets at a given time
has fdi increased or decreased - ANS-increased
why has FDI grown so rapidly - ANS--circumventing trade barriers
-changes to democracies
-globalization
fdi targeted: - ANS-developing countries and the US
internalization theory - ANS-why firms prefer fdi to licencing
Why do firms shy away from licensing? - ANS--gives away valueable knowledge
-doesn't provide tight control
forms of FDI - ANS--A greenfield investment - the establishment of a wholly new
operation in a foreign country
-Acquisition or merging with an existing firm in the foreign country
when exporting profit decreases what happens to FDI - ANS-increases as an alternate
to exporting
Multipoint Competition - ANS-arises when two or more enterprises encounter each
other in different markets and imitate each other
, location-specific advantages - ANS-arise from using resource endowments or assets
that are tied to a particular location and that a firm combines with its assets (human and
natural resources) (Dunning)
silicon valley is an example of: - ANS-location-specific advantages (tech business)
radical view - ANS--marxism
-imperialist domination
-home countries abuse host
free market view - ANS--adam smith and ricardo
-THEORY OF COMPETITIVE ADVANTAGE
-increased world efficiency
-lower cost
pragmatic nationalism - ANS--ups and downs to fdi
-profits go back to foreign country
-its ok if costs outweigh the benefits
host-country benefits of fdi (4) - ANS-1. Resource Transfer Effects (ease of
manufacturing)
2. Employment Effects
3. Balance-of-Payments Effects (a desire to stay in a surplus of exports)
4. Effect on Competition and Economic Growth
host country costs of fdi (3) - ANS--adverse effects on competition
-adverse effects on the balance of payments
-national sovereignty and autonomy risks
home country costs of fdi (3) - ANS--capital outflow
-exporting jobs abroad
home country benefits of fdi (3) - ANS--Positive balance-of-payments effects
-Positive employment effects
-Reverse resource-transfer effect
knickerbocker's theory - ANS-imitative behavior
market maker - ANS-connects investors and borrowers
hedge fund - ANS-private investment funds making long bets on increase in value and
short bets on decrease in value
global equity/capital market - ANS--Attract capital from international investors
-List their stock on multiple exchanges
-Raise funds by issuing debt or equity around the world
