Nationalization vs Privatization
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Questions and Answers

What is the main difference between nationalization and privatization?

  • Nationalization involves transferring ownership from private entities to the government, while privatization involves foreign companies relinquishing control.
  • Nationalization involves government ownership, while privatization involves transferring ownership from the government to private entities. (correct)
  • Nationalization involves transferring ownership from private entities to foreign companies, while privatization involves the government operating businesses.
  • Nationalization involves foreign companies relinquishing control, while privatization involves the government owning and operating businesses.

    • How do domestication and nationalization differ in terms of control and ownership?

  • In nationalization, foreign companies relinquish control and ownership to nationals, while in domestication, the government operates the business being taken over.
  • In domestication, foreign companies relinquish control and ownership to nationals, while in nationalization, the government operates the business being taken over. (correct)
  • In nationalization, both control and ownership are relinquished to nationals, while in domestication, it is the government that operates the business being taken over.
  • In domestication, both control and ownership are relinquished to nationals, while in nationalization, it is the government that operates the business being taken over.

    • What are some common characteristics of government-owned enterprises mentioned in the text?

  • Understaffing, strong financial performance, independence from subsidies, decentralized and apolitical organizations, and high competition.
  • Overstaffing, poor financial performance, dependence on subsidies, centralized and politicized organizations, and lack of competition. (correct)
  • Volatile staffing levels, varied financial performance, no dependence on subsidies, flexible and neutral organizations, and healthy competition.
  • Optimal staffing levels, excellent financial performance, no need for subsidies, decentralized and meritocratic organizations, and intense competition.

    • What should a company consider when assessing political difficulty in a potential marketing environment?

    <p>Relevance of social unrest, attitudes of nationals, and policies of the host government. (B)</p> Signup and view all the answers

    What do monostasy and systasy emphasize in terms of competition?

    <p><strong>Monostasy</strong> encourages competition, but <strong>systasy</strong> emphasizes cooperation. (B)</p> Signup and view all the answers

    What does an assessment of the political climate entail?

    <p>An investigation of the attitudes of the citizens and government of the host country. (B)</p> Signup and view all the answers

    In order to improve its image as a good corporate citizen in a foreign country, what is one method suggested for multinationals in the text?

    <p>Sharing ownership with local companies (B)</p> Signup and view all the answers

    What is the recommended approach for lobbying activities according to the text?

    <p>Lobbying quietly behind the scenes (D)</p> Signup and view all the answers

    Which of the following is NOT advised in the text for companies operating in foreign countries?

    <p>Becoming involved in political disputes (C)</p> Signup and view all the answers

    What potential negative outcome is associated with converting from a private to a public company according to the text?

    <p>Increased governmental control (C)</p> Signup and view all the answers

    What is a key aspect emphasized in the text regarding a multinational company's approach to shared ownership?

    <p>Sharing ownership with local companies (C)</p> Signup and view all the answers

    What is the primary difference between the avoidance and insurance strategies for managing political risk?

    <p>Avoidance entails screening out politically uncertain countries, while insurance is about shifting the risk to other parties. (D)</p> Signup and view all the answers

    How do multinational corporations (MNCs) safeguard their foreign investments in terms of their technical, operational, and managerial complexity requirements?

    <p>By increasing bargaining power when their requirements exceed the abilities of the host country. (C)</p> Signup and view all the answers

    What is one of the defensive investment strategies mentioned to minimize political risk in the text?

    <p>Purchasing local products and raw materials for production and operations. (C)</p> Signup and view all the answers

    Which strategy involves trying to gain 'control' through political activities, market power, exchange of threats, vertical integration, and horizontal mergers and acquisitions?

    <p>Managerial strategy (B)</p> Signup and view all the answers

    Why do foreigners frequently make a costly mistake when assuming citizens of less developed countries are poor?

    <p>Because they mistakenly assume citizens are poor by choice. (D)</p> Signup and view all the answers

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