Chapter 10

Question 1

unanticipated likelihood that a business’s forein investment will be constrained by a host governments policies

Answer 1

political risk

Question 2

reviews major political decisions that are likely to affect all enterprises in the country

Answer 2

macro political risk analysis

Question 3

directed toward government policies and actions that influence selected sectors of the economy or specific foreign businesses in the country

Answer 3

micro political risk analysis

Question 4

seizure of business by a host country with little, if any, compensation to owners

Answer 4

expropriation

Question 5

identifies that various risks and then assigns a quantitative risk or rating factor to them

Answer 5

comprehensive framework

Question 6

government policies that limit the transfer of capital, payments, production, people, and technology in and out of country

Answer 6

transfer risk

Question 7

government policies and procedures that directly constrain that management and performance of local operations

Answer 7

operational risks

Question 8

government policies or actions that inhibit ownership or control of local operations

Answer 8

ownership-control risks

Question 9

type of high risk investment in which goods or services produced are not simular to those produced at home

Answer 9

conglomerate investment

Question 10

production of raw materials or intermediate goods that are to be processed into final products, run risk of being taken over by government

Answer 10

vertical investments

Question 11

MNC investment in foreign operations to produce the same goods or services as those produced at home, not likely to be takeover targets

Answer 11

horizontal investments

Question 12

agriculture, forestry, mineral, exploration, and extraction sector of economic activity

Answer 12

primary sector

Question 13

manufacturing operations sector of economic activity

Answer 13

industrial sector

Question 14

transportation, finance, insurance sector of economic activity

Answer 14

service sector

Question 15

type I of foreign direct investment

Answer 15

highest risk venture

Question 16

type V of foreign direct investment

Answer 16

lowest risk venture

Question 17

competitive, distributive negotiation

Answer 17

value-claiming negotiation

Question 18

are active in mandating that investors take on partners, require investors to share ownership of their subsidiaries with local partners, play substantial role in the terms of formation and dissolution of alliances

Answer 18

host governments

Question 19

business issues critical to termination of alliance

Answer 19

basic decision to exit
people related issues
relations with host government