Final Exam

Final Exam MGT 448

Please include your answers in the space below each question.

Student Name: __________________________________________________________

1. Describe the two major drivers to globalization and two examples of ‘reasons to go global’. (Please note that the drivers of globalization not the same as the ‘reasons to go global.’) (0.5 points for each correct answer, total = 2)

There are many issues which are resulting as the driver of the globalization and they are playing important role in the globalization of products and services. First of all the decreasing and lowering of the trade and investment hurdles internationally is one of the important reason. After the establishment of the world trade organization in which many countries participated due to the free trade agreements in the countries around the world. After the establishment of GATT (General Agreement of Tariff and Trade) it is the trade agreement between the countries that are willing to carry the free trade around the world.

The aim of these tariffs was to protect the local industries of those countries. But now the scholars of prosperity have though that the world would be become more peaceful and good place to live in when all the countries and their representatives coordinate with each other. The benefit of this is to the countries who do not have much source to utilizes their resources so that they can attract the large foreign investment in their countries. The other reason is the Second World War which was held due to the economic gains and benefits between the counties. So this led to a new concept for the world.

2. What are two disadvantages of using a wholly owned subsidiary mode of entry when entering a foreign market? (1 point for each correct answer, total =2)

building a wholly owned susbsdiaries usually is the method most costly to serve foreign markets. Companies do this would remove a lot of costs and risks in developing operations in a foreign...