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Multinational diversification

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Given the advantages of international diversification, why do some firms choose not to expand internationally? Ventures in foreign countries without strong contract law are more risky, because managers may be subjected to bribery attempts once their firms' assets have been invested in the country. How can managers deal with these problems.

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Many factors need to be considered when considering international diversification. Depending on how large the organization, there are various pros and cons. Most organizations consider international diversification to reduce costs, diversify their firm, take advantage of domestic and international political and economic changes, and tap into new and growing markets. These, however, can be the same reasons that many organizations do not expand internationally.

The new environment in a different country can be quite different than the domestic environment. The environment would bring about political and cultural adjustments. Employees move around different sites for the ...

Solution Summary

Many factors need to be considered when considering international diversification. Depending on how large the organization, there are various pros and cons. Most organizations consider international diversification to reduce costs, diversify their firm, take advantage of domestic and international political and economic changes, and tap into new and growing markets. These, however, can be the same reasons that many organizations do no expand internationally.

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