1.4.1-1.4.4
An individual or group that affects, or is affected by, an organisation and is directly involved inside the organisation.
Internal Stakeholder
Long-term investment by multinational corporations in a foreign country.
Foreign Direct Investment
Cost reductions experienced by a business when it expands its output.
Internal Economies of Scale
Expansion of a business with its own resources.
Internal Growth
A form of external growth where two businesses create, own and operate a third organisation.
Joint Venture
The owners of the company who invest in a business in order to receive a return on their investment.
Shareholders
A company that operates in at least two countries, one of which is not the company's home country.
Multinational Company
Cost-saving benefits of large businesses in their region or industry that are not under the control of the business.
External Economies of Scale
Expansion of a business by relying on external resources, typically with another organisation.
External Growth
A form of external growth where two or more businesses work together to achieve common objectives but do not create a new enterprise.
Strategic Alliance
An individual or group that affects, or is affected by, an organisation, but who is not directly involved inside the organisation.
External Stakeholders
What is one reason for growth of MNCs
Larger Customer Base, Brand Recognition, Technology, Tax Incentives, Avoiding Trade Barriers, Costs of Production, Lack of Regulation, Spreading Risks
The increase in the per-unit production cost as a business grows.
Diseconomies of Scale
A form of external growth where two businesses combine to form a new business; the new business replaces the two that existed before
Merger
A form of external growth where a franchisee buys the rights to use the name and business model of a franchisor.
Franchising
What are the 3 types of sustainability that could create stakeholder conflict?
Economic, Sociocultural, and Environmental
Name a positive impact of MNCs
Employment Opportunities, Wages Offered, Worker Training, Provide Opportunities for local businesses that become direct suppliers, Stimulate the Local Economy, Infrastructure can Reshape Local Community, Improve local Products, Governments benefit from multinationals through taxes and foreign currency earnings from the initial investment and from the sales of exported goods.
The increase in per-unit production cost as a business grows, usually explained by the difficulty of managing internally large operations.
Internal Diseconomies of Scale
One company purchases another company with permission of the board of directors.
Acquisition
The four quadrants of the Ansoff Matrix
Market Penetration, Market Development, Product Development, Diversification
Adopting the __________ is one example of how businesses can align their practices with the needs and interests of internal and external stakeholders.
ESG framework
Name a Negative impact of MNCs
Safety, Pay, Environmental Standards, Pollution, Water Shortages, Increase in local pricing, harm local businesses vying for resources, countries may switch from local goods to international products, can destroy culture
The increased unit cost of production for a business due to the expansion of the industry in which the business operates.
External Diseconomies of Scale
Occurs when one company purchases another company without permission of the board of directors or the company.
Takeover
What are the two types of diversification and how are they different?
Related: When a business enters a new industry that has similarities with the company's existing industry.
Unrelated: When a business enters a new industry that has no similarities with the company's existing industry