国际商务英文-吉利收购沃尔沃.doc

41002072 李民权Exam Questions (50% each)1) Gili, a Chinese car maker, is spending a very large amount of money buying another foreign car producer. According to the theories in this course, do you think this is a good deal? Take Chinese Geely close to Volvo acquisition for example, I dont believe its in the best interest for Chinese carmakers.Chinese carmaker Geely is said to be in the final spurt to acquire Sweden -based Volvo Cars from Ford-but analysts are already criticizing the deal.1. Mergers and acquisitions (abbreviated M&A) is an aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location, without creating a subsidiary, other child entity or using a joint venture. The distinction between a merger and an acquisition has become increasingly blurred in various respects (particularly in terms of the ultimate economic outcome), although it has not completely disappeared in all situations.Firstly, the acquisition extend the transaction cost.In economics and related disciplines, a transaction cost is a cost incurred in making an economics exchange or the cost of participating in a market.A number of kinds of transaction cost have come to be known by particular names: Search and information costs are costs such as those incurred in determining that the required good is available on the market, which has the lowest price, etc. For Bargaining costs are the costs required to come to an acceptable agreement with the other party to the transaction, drawing up an appropriate contract and so on. In game theory this is analyzed for instance in the game of chicken. On asset markets and in market microstructure, the transaction cost is some function of the distance between the bid and ask. Policing and enforcement costs are the costs of making sure the other party sticks to the terms of the contract, and taking appropriate action if this turns out not to be the case.2.Asset specificity is a term related to the inter-party relationships of a transaction. It is usually defined as the extent to which the investments made to support a particular transaction have a higher value to that transaction than they would have if they were redeployed for any other purpose. Asset specificity has been extensively studied in a variety of management and economics areas such as marketing, accounting, organizational behavior and management information systems.MultidimensionalityScholars have acknowledged the multidimensional property of asset specificity. For example, Williamson (1983) identified four dimensions of asset specificity: Site specificity, e.g. a natural resource available at a certain location and movable only at great cost; Physical asset specificity, e.g. a specialized machine tool or complex computer system designed for a single purpose; Human asset specificity, i.e., highly specialized human skills, arising in a learning by doing fashion; and Dedicated assets, i.e. a discrete investment in a plant that cannot readily be put to work for other purposes.Malone et al. (1987) made an important addition to the above list: Time specificity, an asset is time specific if its value is highly dependent on its reaching the user within a specified, relatively limited period of time.Joskow (1988) pointed out that these different categories point to essentially the same phenomenon, but that it is instructive in empirical analyses to treat each category distinctly. Joskows series of papers have looked at contract structuring in order to examine how contracts mitigate transaction costs inherent in a market based relationshipZaheer and Venkatraman (1994) acknowledge four asset specificity dimensions: site, human, physical, and dedicated assets. In addition, they define two dimensions of asset specificity in their study: human asset specificity and the newly-developed procedural asset specificity, where Human asset specificity deals with the degree to which skills, knowledge and experience of the agencys personnel are specific to the business process. Procedural asset specificity incorporates notions of human asset specificity and refers to the degree that an agencys workflows and processes are customized to exploit the other partys capabilities.Most theoretical work focus on the relationships between asset specificity and sunk cost effects, transaction costs, vertical integration, and uncertainties.3. Compare with outsourcingOutsourcing is the process of contracting an existing business process which an organization previously performed internally to an independent organization, where the process is purchased as a service. Though this practice of purchasing a business function - instead of providing it internally - is a common feature of any modern economy, the term outsourcing became popular in America near the turn of the 21st century. An outsourcing deal may also involve transfer of the employees involved to the outsourcing business partner.Although the definition of outsourcing includes both foreign or domestic contracting, the term is sometimes used exclusively referring to the former. The more clear term for this is offshoring, which is described as “a company taking a function out of their business and relocating it to another country,” whether the external country is physically offshore or not.The opposite of outsourcing is called insourcing, and is sometimes accomplished via vertical integration.The most common reasons why companies decide to outsource include cost reduction and cost savings, the ability to focus its core business, access to more knowledge, talent and experience, and increased profits.Many companies decide to outsource because it cut costs such as labor costs, regulatory costs, and training costs. Foreign countries tend to have workers who will complete the same amount of work as in the United States, but for less than half the salary that an American employee will make . This motivates companies to outsource overseas to find foreign workers who are willing to work for these lower wages. The company can spend up to half the usual cost to train these workers to become experts in a different country . Lower regulatory costs are an addition to companies saving money when outsourcing. Comparing the costs to employing a worker in the United States to a worker in China, it is noticed that an employer in the U.S. has to pay higher taxes (social security, Medicare, safety protection (OSHA regulations) and also FICA (taxes).Companies are able to focus their money and resources more towards improving the core aspects of its business when outsourced. For example an insurance company may outsource its landscaping functions to a service provider that specializes in landscaping since it is irrelevant to the core operations of insurance. The landscaping is performed by an expert outsourced organization and the insurance company can focus on doing what it specializes in. This allows the outsourcing company to build onto its core functions that keep the business running smoothly. Another example is that companies and public entities such as a public school district that outsources functions, such as their payroll offices to companies like ADP or Ceridian, which specialize in payroll functions.In the case of outsourcing, firms may find that workers in other countries can provide better customer support than their domestic counterparts. For example, an online coffee shop owner who moved his calling center to the Philippines found that his customers received better customer support from workers in this country.Revenue and profit plays a large role in the reason for a company outsourcing. Since the costs are cheaper in different countries for a corporation to run it, as well as to train the employees, this saves the company a large sum of money. More profit comes in when the vendors are able to purchase products at a less expensive rate and continue to sell them at a reasonable price for consumers. The prices are reduced for services as well as products when purchased at a cheaper price. RisksWhen companies offshore services, even though it may not be the core parts of the business, those jobs leave the home country for foreign countries. . Outsourcing may increase the risk of leakage, reduce confidentiality, as well as introduce additional privacy and security concerns.AdvantagesCompanies are able to provide services and products to consumers at a cheaper price while still having a large margin for profit. This profit margin benefits both the company as well as the consumer. The cheaper prices lead to an increase a companys economy. Although losing jobs hurts the economy because more citizens become unemployed, the cheaper prices allows customers to purchase more products and services which helps to rebuild an economy2) As CEO of large Chinese firm, you are developing a strategy to establish branches in all major oversea markets. Now the issue is how to select an appropriate cultural management orientation for your international ventures. Please show us how you will make the selection by providing a detailed discussion with consideration of all the significant factors. Culture management orientation can be defined as the general philosophy or approach taken by top management of the MNC in the design of its overall international management strategy, including those to be adopted in all overseas affiliates.There are three CM orientations, adaptive, exportive, and integrative ones.1. Adaptive CM orientation is one in which top management tries to create management systems for affiliates that reflect the local environment (low internal consistency with the rest of the firm and high external consistency with the local environment). With this orientation, there is almost no transfer of management philosophy,polices or practices either from the parent firm to its overseas affiliates or between overseas affiliates.2. Exportive CM orientation is one in which top management prefers a wholesales transfer of the parent firms management system to its overseas affiliates(high internal consistency and low external consistency ), replicating in its overseas affiliates the management policies and pra