Asked by Logan perry on Jul 17, 2024
Verified
Which of the following is NOT likely to be a reason that companies move into international operations?
A) to take advantage of lower production costs in regions where labour costs are relatively low
B) to develop new markets for the firm's products
C) because important raw materials are located abroad
D) to diversify the risk of global terrorist attacks
International Operations
Business activities that a company conducts outside its home country, including sales, manufacturing, and production.
Production Costs
The total cost incurred by a business to manufacture a product or to provide a service. This includes materials, labor, and overhead costs.
- Understand the decision-making process involved in entering international operations and the risks associated with it.
Verified Answer
LS
Lekshmi SudhaJul 23, 2024
Final Answer :
D
Explanation :
Companies may move into international operations to take advantage of lower production costs, develop new markets, or access important raw materials. However, diversifying the risk of global terrorist attacks is not a common reason for companies to expand internationally. While international operations may provide some level of diversification, the primary reasons for expanding abroad are typically related to market opportunities and cost savings.
Learning Objectives
- Understand the decision-making process involved in entering international operations and the risks associated with it.
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