Similarly, political policies with respect to foreign direct investment, repatriation and taxation and licensing/regulations for foreign companies in India can affect Ford's decision to expand its operations in India.
Foreign Manufacturing Joint Ventures: In contrast to licensing arrangements, foreign manufacturing joint ventures allow for the U.S. company to have a stake and management role in the foreign operation.
An example is Ford Motor Company (US) with Mazda Company (Japan). A direct investment is one in which a company or investor contributes resources with the purpose to have a voice in the management of the organization.
Other countries may not need state-of-the-art technology and/or may be unable to afford the most sophisticated and expensive products.
Any licensor cannot request an extension of confidentiality beyond 10 years of the contract, nor prevent any sale or export of the products or services (Schlevogt, 2000). Franchising.
Since the exchange rates between two countries is continuously changing and is extremely volatile in today's business situations, any changes on either side of exchange rate between two countries significantly alters the revenues of the company.
Global Business Law: Licensing agreements, foreign direct investment, managine risk: Often differences arise between parties involved in international trade. They are settled through International arbitration. Arbitration is a leading method for resolving disputes arising from international commercial agreements and other international relationships. It is a creature of contract under which the parties involved agree to submit disputes to binding resolution by one or more arbitrators selected by and or behalf of the parties and applying adjudicatory procedures, by including a provision for the arbitration of future disputes in their contract
In an extreme case, where a foreign government is overthrown and the new regime does not respect any existing treaties, losses can be severe.
This culture will ensure that all employees of Ford whether in the US or in any other part of the world will act in an ethical manner.
If there is the risk of cancellation or non-renewal of export or import licenses or risk of the imposition of an import ban after the shipment of the goods in any country, then there would be fewer business transactions to be done with companies established
that could run counter to state and federal laws, plus licensing actually limits the growth of any product or organization.