Assignment Problem: Managing a multinational procedure and corporate governance
SCENARIO
"Based in part on the development of modern communications and transportation technologies, theriseofthemultinationalcorporation wasunanticipated bytheclassicaltheory of international trade as ?rst developed by Adam Smith and David Ricardo. According to this theory, which rests on the doctrine of comparative advantage, each nation should specialize in the production and export of those goods that it can produce with highest relative ef?ciency and import those goods that other nations can produce relatively more ef?ciently". Alan C
Problem 1: Discuss the factors that convert a domestic based firm to a multinational organization.
Problem 2: Evaluate the finance function of an MNC, based on four type of decisions the finance manager would make
Problem 3: India and Maldives produce textiles and Dry Fish. If all the resources of the two countries were fully allocated, this is what they could produce
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Country
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Textiles
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Dry Fish
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India
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1000 kg
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600 kg
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Maldives
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750 kg
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1300 kg
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a. Illustrate what is absolute advantage and, based on the concept of absolute advantages which country should produce Textiles and which country should produce Dry Fish.
b. Illustrate what is comparative advantage and Based on the concept of Comparative advantages which country should produce Textiles and which country should produce Dry fish.
c. Explain the reasons why some countries do have a comparative advantage against another country. (your answer should be based on India and Maldives in answer(b)