International-Business-Dr-R-Chandran-E-book

Foreign firms adopt certain methods as mentioned below:
24
International Business- Dr. R. Chandran
Any Country
Investor Money Projects/Technology/
Trade
ROI
Short term/Long
term
a. They control the operations through subsidiaries to achieve strategic
synergies.
b. They have control through technology, manufacturing expertise,
intellectual property rights and brand name.
c. One permanent person or a team in the country of operation is
appointed to monitor day to day operations.
The most attractive part of the operation is the direct investment, which
contributes to optimization of resources in the host country, generating
employment opportunities and enhancing the standard of living in the host
country. The other major developments, which have taken place during the
past two decades, are exposure of the host countries to advance technology
and quality products. It is boon to the host country since capital is great
resource it is coming through investment.
The main disadvantages are lack of clarity of repatriation of profits,
imposition of restrictions by host countries and elimination of small and
medium industries due to the financial power of the investor. A number of
South American countries like Argentina and few South East Asian nations
like Indonesia fell pray to the dominant forces of overseas investors. They
feel that the old colonialism may re-emerge through investments.
Generally, a foreign investment takes place on full swing in developing
countries only in the past two decades. China, Taiwan, India, Brazil,
Argentina and other developing countries have started attracting huge
foreign investments. If it takes place in specific sectors like infrastructure,
mining, marine technology and agro processing, it is highly beneficial to
both the host country and investor.
Only for Private Circulation