Nationalization vs Privatization

LeanSalamander avatar

Start Quiz

Study Flashcards

16 Questions

What is the main difference between nationalization and privatization?

Nationalization involves government ownership, while privatization involves transferring ownership from the government to private entities.

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

In domestication, foreign companies relinquish control and ownership to nationals, while in nationalization, the government operates the business being taken over.

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

Overstaffing, poor financial performance, dependence on subsidies, centralized and politicized organizations, and lack of competition.

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

Relevance of social unrest, attitudes of nationals, and policies of the host government.

What do monostasy and systasy emphasize in terms of competition?

Monostasy encourages competition, but systasy emphasizes cooperation.

What does an assessment of the political climate entail?

An investigation of the attitudes of the citizens and government of the host country.

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?

Sharing ownership with local companies

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

Lobbying quietly behind the scenes

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

Becoming involved in political disputes

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

Increased governmental control

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

Sharing ownership with local companies

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

Avoidance entails screening out politically uncertain countries, while insurance is about shifting the risk to other parties.

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

By increasing bargaining power when their requirements exceed the abilities of the host country.

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

Purchasing local products and raw materials for production and operations.

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

Managerial strategy

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

Because they mistakenly assume citizens are poor by choice.

Learn about the differences between nationalization and privatization, where nationalization involves government ownership while privatization involves transferring ownership to private entities. Understand the implications of each approach in business operations.

Make Your Own Quizzes and Flashcards

Convert your notes into interactive study material.

Get started for free
Use Quizgecko on...