Making a $100 million investment in Russia or Poland
1. You are the CEO of a company that has to choose between making a $100 million
investment in Russia or Poland. Both investments promise the same long-run return, so your
choice is driven by risk considerations. Assess the various risks of doing business in each of
these nations. Which investment would you favor, and why?
2. Read the Management Focus feature titled Did Walmart Violate the Foreign Corrupt
Practices Act? What is your opinion? If you think it did, what do you think the consequences
will be for Walmart?
3. In a world of zero transportation costs, no trade barriers, and significant differences between
nations with regard to factor conditions, firms must expand internationally if they are to
4. In what kind of industries does a localization strategy make sense? When does a global
standardization strategy make most sense?
5. Discuss this statement: “An understanding of the causes and consequences of performance
ambiguity is central to the issue of organizational design in multinational firms.”
6. Describe the organizational architecture that a transnational firm might adopt to reduce the
costs of control.
7. You are the assistant to the CEO of a small technology firm that manufactures quality,
premium-priced, stylish clothing. The CEO has decided to see what the opportunities are for
exporting and has asked you for advice as to the steps the company should take. What
advice would you give the CEO?
8. How might a company make strategic use of countertrade schemes as a marketing weapon
to generate export revenues? What are the risks associated with pursuing such a strategy?
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