2. What effect will deprivatization have on foreign investment in Russia? a. Foreign investment would probably decline in Russia as the risk of operating there may be too high. 3.
Disadvantage: * Technical evaluation after price negotiation causes an unfair price competition during auction between high quality suppliers and low quality suppliers. Suppliers with low quality may have lower cost structure comparing to high quality suppliers. Without setting the quality standard before the auction, it is likely that the auction winner may not be able to meet Casturn’s technical evaluation. * The cross-function time at step 5 have veto power. Even though this practice reduces the chance of making a bad re-sourcing decision, it wastes lots of time and energy from CMC and engineer team, and may discourage nominated supplier.
Chapter 6: 3. Should a company ever produce an output if a manager knows it will lose money over the period? Explain. It would depend on if they can redeem themselves by producing money per unit. If they can produce the money over time this way, they shouldn’t lose money over time.
* Diverse products Diverse products and revenue should help shield the business from shocks in any one part of their business. Different products have different characteristics. Those characteristics do not always match; therefore, a company can lower their risk by investing in a business with low correlations with other products. This lowers risk and increases the value of the business over the long-term. WEAKNESS: * Company size "Company Size" will have a long-term negative impact on this entity, which subtracts from the entity's value.
With Mr. Parker being clearly motivated to merge, I would like to consider motivations for Mr. Baily to oppose the merger. When Mr. Bailey was initially approached regarding a merger with USO he expressed concern regarding the financial stability of the UOC versus the financial stability of the USO. The UOC is financially stable due to a reserve fund that is in place due to their current business model. These funds allow the UOC to be flexible and maintain stability if they only cut projects that do not meet their fund-raising goals. The USO does not have this flexibility and could not operate within their current successful business model.
o A tendency to avoid reversing changes even if it was not the best choice o In reality, past expenditures are sunk costs and the organization should use a clean slate to look at new choices, but to the manager, this will come at great personal loss. • This relates to strategy because it is important to understand the effect management has on it. o If a manager will suffer personal embarrassment or a loss by adopting a new (although better) strategy, they are more likely to simply stick with the current course of action. o This can be avoided by assessing and addressing the problems of an organization prior to major investments being made o Implication on strategic choice, as they can act for the betterment or detriment of the organization. o Differences in manager’s preferences are specific to their individual personalities, experiences and situations.
Is the real estate subsidiary a good idea? If the managers buy more stock, what is the appropriate price? There are two major concerns which are gaining competitive advantage and determining comparable valuations. Brazos should allow the company to sell the managers some stock of the business to benefit the managers. But the amount that a manager can hold stocks should be limited because the ownership would be split in this way as it is not good for Brazos itself to decrease its ownership.
“The net export effect of expansionary monetary policy will be in the same direction as the monetary policy effect”.1 Recommended Course of Action Although both fiscal policy and monetary policy prove to have beneficial effects on an economy during a contractionary period, we believe that the government should use a combination of both policies…… - The money supply may be ineffective, but in the end people want to make sure that they will have money to save up in case of emergencies. There is no change in investment spending meaning little change in aggregate demand. - Further to this, the fiscal policy may be ineffective, as the extensive “time lags” may dig us deeper, creating a depression. - To what extent?? ?
Even with a limited number of products that were being produced the rational choice would be for prices to be high. Instead prices were maintained to be low which had a drastic affect on the prices later on. This was the prelude to the crisis. The actual crisis was when the Russian government was forced to borrow from the International Monetary Fund. The IMF loaned the amount of money on various conditions to the Russian Government.
While this situation may not impact the average consumer, companies that engage in foreign transactions with international companies could face losses, and gains, due to changes in the foreign currency exchange rate. US companies that do business with foreign companies have to be careful to not incur losses when making purchases or sales due to fluctuating foreign currency exchange rates. A company may make use of derivatives to minimize transaction exposure losses when engaging in business with foreign companies and currencies. The use of a derivative by a company who is trying to insulate itself against this type of loss is called hedging. Although hedging has its supporters and detractors, as well as its advantages and disadvantages, it is a common practice in our global business world today.