1). International organizations can choose from international strategy based on the structure of the organization. The two major structure control systems are centralization and decentralization strategies;
The advantage is faster and better decision making while the disadvantage is inexperience
The advantage is that there is uniformity and specialization of work while major disadvantage is that there is a lot of bureaucracy and delays in decision making.
2). The Licensing fee charged by Dua as a percentage of all its revenues:
Assets $100 Million
Profits : $48 million = 48% of total assets
Non-proprietary Return on Assets = 8% = $million
60% of return on assets
Total amount for me and non-proprietary = 60% + 8% = 68%
Licensing fee as a percentage of revenues should be 32% of the return on assets.
If sales are 150 million
Return on assets is equal to 48% of 150 million = $72 million
Licensing fee = 32% of $72million = $23.04 million
3). A foreign subsidiary refers to an independent branch of a corporation that operates as a separate entity outside the respective country and where the parent or main company is located. The host company is interested on the operations of the foreign subsidiary due to the levying of taxes that is payable from the profits that have accrued from the foreign subsidiary through the parent company. The law requires that all companies declare and pay taxes on all the profits that a company has earned both in its local and foreign operations including the profits earned from the subsidiaries that they have a controlling stake. Otherwise the earnings from subsidiaries that they have less than the majority shares the income would be included as other income in the income statement.
a). A Licensee is interested in a licensing agreement as one way of ensuring that the agreement is legal and can be enforceable in a court of law. It also ensures that the agreement has the approval and recognition of the host government. The agreement protects the rights of the licensee as well as spells out the period of the license, the agreement terms, the nature of the agreement, conditions and the rates of payments agreed on. The agreement is important as it protects the rights of both parties. Licensee describes an entity or organization or an individual who has been given or granted permission legally by another entity or company to engage in a lawful activity.
b). The strengthening of the Canadian currency would impact the country’s domestic productivity negatively as the products would be more expensive in foreign countries. International market structures would decrease the demand of Canadian products as the prices would increase international affecting the demand of the products negatively.
c). It is a letter issued from the bank that guarantees payments from a buyer to a seller. It confirms that the payments would be made as agreed and on time. The letter must have express assurance that the bank guarantees payment to the seller of the goods or products in question from the seller. The payments amounts would be as agreed by the seller and would be made on the date agreed on.
d). Evolving multinationals are companies that are still developing and growing globally. The evolving processes. The companies evolve from domestic companies, international and consolidated international companies.
e). Foreign Direct Investment (FDI) and Portfolio Investment are two ways investors can invest in country. FDI refers to investment from across the country’s border while private or public investment is investment from the residents of a country within its borders.