There could be a dramatic increase in the market as firm move into the global market. As part of the firms'expansion effort they have to be successful in the emerging market by providing incentives to retailers tostock its products and use local banking facilities and agents in collecting payments.

The primary reason in investing in foreign market is to generate above average return on investments.Firms that have specialized in a certain type of product and have expanded both horizontally and verticallyin the local market, have to find a new source of investments where they could use their available resourcesfor new business opportunities worldwide.

Firms enjoy the _________ by producing and distributing products internationally.

The firm can standardize their products that can be suitable to all types of customers worldwide especially in theelectronic industry and other consumer products.

No country is a monopoly of knowledge base. Each country developed core competencies that can be usedin the international market through resource and knowledge sharing between units across country borders.The sharing generates synergy that contributes to the production of higher quality goods and services atlower cost.

Some firms operate in another country because of the lower labor cost.

It is also known as case law, ____ is a legal system that originated in England and spread toAustralia, Canada, the United States, and former members of the British Commonwealth.

also known as code law, ____ is found in France, Germany, Italy, Japan, Turkey, and Latin America.Its origins go back to Roman law and the Napoleonic Code.

is based on an all-inclusive system of laws thathave been codified; the laws are clearly written and accessible. It is divided into three codes: commercial, civil, andcriminal.It is considered complete as a result of catchall provisions found within the law. Rules and principlesform the starting point for legal reasoning and administering justice.

It is a document that describes the values and expectations that guide decision-making by all employees in the firm.

also known as a centrally planned economy; a _____ makes the state a dominant force in the production and distribution of goods and services.

is primarily judicial in origin and based on court decisions

is primarily legislative in origin and based on laws passed by national and local legislatures.

   describes superior features of a nation that provide unique benefits in global competition.

-        refers to assets and capabilities of a company that are difficult for competitors to imitate.

is the seizure of corporate assets without compensation.

-        is the system of procedures and processes by which corporations are managed, directed, and controlled.

-        provides the means through which the firm’s directors and

managers undertake such behaviors.

Give the Ethical Standard Approaches for Corporate Governance

What are the benefits of corporate governance?

It refers to operating a business in a manner that meets or exceeds the ethical, legal, and commercial expectations of customers, shareholders, employees, and the communities where the firm does business.

It is an extreme form of unethical behavior. It is the practice of obtaining power, personal gain, or influence through illegitimate means and usually occurs at others’ expense.

a company's ability to lower costs of production to offer quality products at low prices.

  (Also known as political risk) refers to the potentially adverse effects on company operations and profitability caused by developments in the political, legal, and economic environment in a foreign country.

     refer to the nature of home-market demand for specific products and services. The presence of demanding customers pressures firms to innovate faster and produce better products.

  a framework to explain the  extent and pattern of the value chain operations that companies should own abroad.

What are the 3 conditions in eclectic paradigm?

The second condition that determines whether a firm will internationalize by FDI is the presence of ______

These are the comparative advantages available in individual foreign countries that may be translated into firm competitive advantages. These may include natural resources, skilled labor,low-cost labor, or inexpensive capital.

is a predicament concerning major conflicts among different interests when determining the most appropriate course of action is confounded by a set of solutions that are equally justifiable and often equally.

the sale of products or services to customers located abroad from a base in the home country or a third country

the procurement of products or services from suppliers located abroad forconsumption in the home country or a third country

it is the seizure with compensation.

Factor Proportions Theory is sometimes called?

a theory suggests that each country should export products that intensively use relatively abundant factors ofproduction and import goods that intensively use relatively scarce factors of production.

is the initiator of an international business transaction; it conceives, designs, and producesofferings intended for consumption by customers worldwide

is an internationalization strategy in which the firm establishes a physicalpresence abroad through acquisition of productive assets such as land, plant, equipment, capital, and technology.

It is a foreign-market entry strategy that gives investors partial or full ownership of a productiveenterprise typically dedicated to manufacturing, marketing, or management activities. Investing suchresources abroad is generally for the long term and involves extensive planning.

refers to the passive owner- ship of foreign securities such asstocks and bonds to gain financial returns.

It does not entail active management or control over theseassets. The foreign investor has a relatively short-term interest in the ownership of theseassets.

involves wrongfully deceiving a person or other party to give up assets or cash.

explains the process by which firms acquire and retain one or morevalue-chain activities inside the firm.

refers to firms’ performance of trade and investment activitiesacross national borders.

we also refer to internationalbusiness as .

refers to the transfer of assets to another country or the acquisition of assets in thatcountry.

explain international tradebased on the evolutionary process that occurs in the development and diffusion of products to markets around theworld.

3 stages of evolution in IPLC

a new product typically originated in an advanced economy, such as Germanyor the United States.

It provides a framework of rules and norms of conduct that mandate, limit, or permit specifiedrelationships among people and organizations and provide punishments for those who violate these rules and norms.

it exhibits the features of both a market economy and a command economy. It combines stateintervention and market mechanisms for organizing production and distribution.

it is consist of two or more legal systems operating together

it refers to resources or capabilities a company holds that fewother firms have.

It is the process of decentralizing operating decisions to tailor fit the product according to the needs andwants of the consumer in the particular country.

is a proactive economic development plan a government launches to build or strengthena particular industry, often implemented in collaboration with the private sector.

describes government seizure of an entire industry, with or without compensation

Government seizure takes on various forms

It argues that increasing returns to scale, especially economies of scale, are important for superior international performance in industries that succeed best as their production volume increases.

it is observed that trade was growing fastestamong industrialized countries with similar factors of production. In some new industries, there appeared to be no clearcomparative advantage. The solution to this puzzle became known as

is a set of formal institutions that constitute a government. It includes legislative bodies, politicalparties, lobbying groups, and trade unions.

Individuals can own property and assets and increase one’s asset base by accumulatingprivate wealth. Property includes tangibles, such as land and buildings, as well as intangibles, such as stocks, contracts,patent rights, and intellectual assets

It refer to the presence of clusters of suppliers, competitors, and skilledworkforce.

is the belief that ethical truths are not absolute but differ from group to group. According to thisperspective, a good rule is, “when in Rome, do as the Romans do”.

is a legal system which strongly influenced by religious beliefs, ethical codes, and moral values viewedas mandated by a supreme being. The most important religious legal systems are based on Hindu, Jewish, and Islamiclaw. A

Its fundamental principle is that capital and wealth should be vested in the state and used primarily as ameans of production rather than for profit. Socialism is based on a collectivist ideology. Collective welfare of people isseen to outweigh the welfare of the individual.

is the threat or actual use of force or violence to attain a political goal through fear, coercion, orintimidation. It is sometimes sponsored by national governments.

the state attempts to regulate most aspects of publicand private behavior. the government seeks to control not only all economic and political matters but also theattitudes, values, and beliefs of the citizenry

implies that products and services cross national boarders

It is an international strategy through which the firm seeks to achieve global efficiency and localresponsiveness. It requires close global coordination and local flexibility as it needs to build and implementshared vision and individual commitment through a network of common objectives.

WHY DO FIRMS INTERNATIONALIZE?