Discuss the role entrepreneurs and small businesses play in the ...

[karlynnae]

Discuss the role entrepreneurs and small businesses play in the expansion of FDI. What are some of the surprises that managers face as they invest in new markets abroad?
 
  What will be an ideal response?

Question 2

________ is the process of staffing a company and ensuring that employees are as productive as possible.
 
  A) Business process reengineering
  B) Human resource management
  C) Organizational diagnostics
  D) Industrial relations

[Sarahjh]

Answer to Question 1

Entrepreneurs and small businesses also play a role in the expansion of FDI inflows. There is no data on the portion of FDI contributed by small businesses, but we know from anecdotal evidence that these companies are engaged in FDI. Unhindered by many of the constraints of a large company, entrepreneurs investing in other markets often demonstrate an inspiring can-do spirit mixed with ingenuity and bravado.
Building facilities in a market abroad can be difficult. Managers can minimize risk by preparing their companies for a number of surprises they might face.
1. Human Resource Policies-Companies cannot always import home country policies without violating local laws or offending local customs. Countries have differing requirements for plant operations and their own regulations regarding business operations.
2. Labor Costs-France has a minimum wage of about 12 an hour, whereas Mexico has a minimum wage of nearly 5 a day. But Mexico's real minimum wage is nearly double that due to government-mandated benefits and employment practices. Such differences are not always obvious.
3. Mandated Benefits-These include company supplied clothing and meals, required profit sharing, guaranteed employment contracts, and generous dismissal policies. These costs can exceed an employee's wages and are typically not negotiable.
4. Labor Unions-In some countries, organized labor is found in nearly every industry and at almost every company. Rather than dealing with a single union, managers may need to negotiate with five or six different unions, each of which represents a distinct skill or profession.
5. Information-Sometimes there simply is no reliable data on factors such as labor availability, cost of energy, and national inflation rates. These data are generally high quality in developed countries and suspect in emerging and developing ones.
6. Personal and Political Contacts-These contacts can be extremely important in developing and emerging markets and can be the only way to establish operations. But complying with locally accepted practices can cause ethical dilemmas for managers.

Answer to Question 2

B