Discussion Question 1: Benefits and Risks of International Business
As an overall review of this chapter, identify possible reasons for growth in international business. Then, list the various disadvantages that may discourage international business.
Discussion Question 2: Centralization and Agency Costs
Would the agency problem be more pronounced for Berkely Corp., whose parent company makes most major decisions for its foreign subsidiaries, or Oakland Corp., which uses a decentralized approach?
Discussion Question 3: Exposure to Exchange Rates
McCanna Corp., a U.S. firm, has a French subsidiary that produces wine and exports to various European countries. All of the countries where it sells its wine use the euro as their currency, which is the same currency used in France. Is McCanna Corp. exposed to exchange rate risk.
Discussion Question 4: Impact of Political Risk
Explain why political risk may discourage international business.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.