Explore BrainMass

Factors for MNCs operating in less developed countries

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

What would be some recommendations for MNCs operating in less developed countries (LDC) to promote a mutually beneficial, long-term, constructive relationship based on CSR and interdependence with the LDC?

© BrainMass Inc. brainmass.com October 25, 2018, 8:18 am ad1c9bdddf

Solution Preview

The main component for success is understanding and respecting the cultural differences which exist. This can be critical to the success or failure of any foreign investment. An example is happening now in the Mexican border towns with maquiladoras. Many are now owned and operated by Asian nationals, who have a high tolerance for working very hard and for being highly mindful of expenses and "stretching the dollar" so to speak. On the other hand, Mexican nationals have a culture which stresses the family, and which cultivates the idea of "mañana" in order to get things done. In addition, the Mexican culture has been linked to splitting the work day via "siesta" time. As one might imagine, these two cultures will ...

Solution Summary

International business operations face many factors to insure a successful business model. This discussion reviews the most substantial factors which need to addresses in order for the firm to establish a road map for a successful operation in a low developed country.

See Also This Related BrainMass Solution

Solving Finance-Related Problems

1.) What factors determine whether a project's beta will be higher or lower when calculated against a domestic stock index versus a world stock index?
2.) What happens to the value of call options when the risk-free rate increases, holding everything else constant?
3.) In terms of pricing, what are the most important differences between warrants and call options?
4.) Define multinational corporation (MNC). What factors must the manager of an MNC consider that a manager of a purely domestic firm is not forced to face?
5.) Explain how a rise in the euro might affect a French company exporting wine to the U.S., and compare that to the impact on a German firm importing semiconductors from the U.S.
6.) Project A has a guaranteed payoff of $200 million, which will exactly compensate the debtholders of the firm. Project B has a 50 percent probability of a $400 million payoff and a 50 percent probability of a zero payoff. Which project do the debtholders prefer and which project do the shareholders prefer?
7.) Explain how the law of one price establishes a relationship between changes in currency values and inflation rates?
8.) What are some strategies for minimizing political risk in a developing country?
9.) How is hedging exchange rate exposure using options different from hedging using forward contracts? What does this suggest about the costs of hedging with options rather than forwards?

View Full Posting Details