MGC2120 Lecture Notes - Foreign Direct Investment, Eclectic Paradigm, Kodak

• School: Monash University
• Department: Management
• Course: MGC2120
• Professor: Dr Lakmal Abeysekera

Document Summary

International business foreign direct investment and the. Stands for foreign direct investment, occurs when a firm directly invests in facilities to produce or market a product in a foreign country. Subsidiaries are created in different countries where the foreign headquarters have significant control of its operations; and it can affect the managerial decisions of the foreign operation. However, operating in different countries can cause conflict to arise. Horizontal direct investment: invest overseas eg: toyota australia. It is similar to put all your eggs into one basket and do the same thing you do at your home country => might be affect by the global economy. Vertical direct investment (backward): invest in a country that provides supplies for that company eg: toyota invests in a company that provides cheaper assets for their manufacturing. Forward: invest in a country that represent a sales/distribution of that country. Eg: toyota opens a sale branch and sell cars through that channel.