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Question
A condition that is conducive to low transfer prices from the parent company to the subsidiary and high transfer prices from the subsidiary to the parent company is where the corporate income tax is lower in the subsidiary's country than in the parent country.
Answer
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Related questions
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In a short essay, discuss why simply examining a country's per capita GDP and its population doesn't necessarily lead to a good estimate for potential demand.
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The number of computer industry firms located in California's Silicon Valley exemplifies the concept of agglomeration.
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Profit figures for individual country operations may obscure the real impact those operations have on total global performance.
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A company can best benefit from a first-mover advantage by moving into a small country, before entering a much larger country.
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U.S. companies generally put earlier and more emphasis on countries where they perceive it's easier to operate.
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Sales potential is probably the most important variable in determining international location decisions because consumer demand exceeds supply.
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When planning international geographic expansion, decision makers use scanning to reduce the number of options available to a manageable number for further detailed analysis.
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Because many regional trading groups prohibit companies from producing in more than one member country, companies need to understand how to evaluate international geographic alternatives.
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Which of the following best explains why Burger King has developed such a strong presence in many of the small countries of Latin America and the Caribbean?
A) These business environments allowed Burger King to take advantage of economies of scale.
B) These countries are close to a Burger King's headquarters.
C) These countries offered greater mobility of funds than countries in the European Union.
D) Unlike the BRIC countries, these business environments did not require escalation of commitment.
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Which of the following is true about projected demographic changes up to the year 2050 that could affect future production and sales locations?
A) The share of the working population should rise in developed countries and fall in developing countries.
B) The growth in per capita GDP should be higher in today's developing economies than in today's developed economies.
C) The percentage of the world population living in today's developed countries is expected to increase.
D) The population should fall in sub-Saharan Africa.
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U.S.-based MNEs are not permitted to set budgets and monitor results using the same exchange rate.
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Why are the concepts of dependability and quality important when developing a global manufacturing strategy?
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What are the advantages and disadvantages of global and domestic sourcing? What role does quality play in deciding between global and domestic sourcing?
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Describe total quality management.
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Duty-free zones are special locations for storing domestic and imported inventory in order to avoid paying duties until the inventory is sold.
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Keiretsu is one of the two major configurations of sourcing.
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Sourcing in the home country enables a company to avoid numerous problems associated with global sourcing.
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Describe the two basic ways that companies can create value. What role does the value chain play in these methods?
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What is the Industry Organization (IO) paradigm? Discuss the underlying assumptions of this model.
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Micro-multinationals are firms that globalize immediately and enter countries with numerous customers, productive workers, and attractive industries.
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A company that develops different capabilities and contributions from different countries and shares them in integrated worldwide operations is using a transnational strategy.
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Pressures for global integration include economic integration, convergent consumer preferences, and political demands imposed by host countries.
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Using a concentrated configuration, an MNE performs value activities in different countries.
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When different companies produce the same commodity, their costs are essentially the same.
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Markets are not always perfectly competitive and some firms consistently outperform industry averages. This suggests that firm performance is also influenced by the presence of bright, motivated managers and their keen sense of innovative products or processes.
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The term ________ refers to a global company that thrives on seeking unique ideas and insights from locations around the world and then leveraging that knowledge in international markets.
A) multidomestic
B) domestic
C) metanational
D) cross-cultural
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A global strategy tends to be more successful when ________.
A) buyers are looking for customized products at bargain prices
B) the industry's product is a commodity
C) entry barriers are low for new firms
D) suppliers have little bargaining power
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Host governments' growing demands for increasing operational transparency will most likely spur companies to make their value chains more ________.
A) locally responsive
B) globally integrated
C) concise
D) complex